Cash Out Refi vs Investment Property Mortgage

2 Replies

Hello BP Investors,

I realize a lot of this is based on personal wealth, income, situation etc.
But "all things being equal"...

I have an opportunity to buy an investment property 3 units(2 Family with business on ground floor, all occupied with long term renters) Conservatively it will yield small pos+ cash flow, but have other personal/business reasons for wanting it and holding it long term.

My question is about financing, can anyone advise which of these two options might be the better choice? re: deductions, taxes, rates, expenses, etc. that I might be unaware of going one way or the other. Looking at $300k (financing 80%) in Orange Co. NY State. 15 yr term

Options:

1) Take a Cash out ReFi on a current fully paid for property which would pay for this property
2) Take an investment property mortgage on the property I am purchasing

My reason for asking about this is I have done the cash out refi route before for purchase of other primary SF residential property, but not on an "investment" property. I can't seem to determine how much the different financing methods will impact my tax deductions, costs and bottom line if at all. Other than the obvious that the cash out refi will be at a better rate.

Thanks again for any advice, info and suggestions,
Dee