Howdy BP folks! Last year I took out 154K cash out refi on a fully owned property. Property value 330K, was approved for 210K. Left the remaining in the house because we assumed we wouldn't need it. Looking back now, it was a newbie mistake. I had been thinking like a saver (take out as little debt as possible, pay down fast) instead of an investor.
Would it be possible to take out a second cash out refi to tap into the remaining equity?
I used to think the same way! After utilizing my equity on my entire portfolio for years, I think the complete opposite today. Now I often ask friends and fellow investors, "what's the rate of return of the equity in your property?" to get them thinking.
To answer your question, yes you should be able to do a second refi with either a bank or a private lender.
I just had this same convo with a bank today, and it seems like you should be able up to %80 of the value.
However, if investment property, not every bank does it, but you will definitely find one.
@Dave Van Horn Thanks for the affirmation. Wish I would've realized this before I paid all those closing fees for the first cash out refi, but I suppose better now than never. In your experience, what's a healthy rate of return of equity in one's property?
@Ozzy Sirimsi This is an investment property, so the first cash out refi was for 70% of value. It was paid off, so that's how we got the equity.
Sure thing Pat, happy to help.
The short answer is: higher than whatever your HELOC rate is, i.e. probably north of 4%. Personally, most of my equity investments are 10% or more. And if I can't find anything like that, the beauty of a HELOC is I don't have to borrow the money (or pay to borrow it) until I want to use it. Best of all, my HELOC is liquid and it gives me asset protection through debt.
@Pat Coogan I remember a list of banks off another BP thread a few years ago that listed some banks doing second mortgages or LOC on investment properties.
Here are the ones I remember. If you search for a bit I'm sure you'll find the thread.
TD Bank also does them too.
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