Is a cash out refinance worth it? 🤔
One of my properties has appreciated roughly 30k in 1 year; should I do a cash out refinance?
I bought the property for 124k in a pretty good neighborhood in Dallas from a very motivated sellers who inherited the house. Redfin, Realtor.com and my realtor all agree that it is now worth somewhere in the 150k range. It’s also worth noting that those platforms still have picture of the House from before I beautified the kitchen, restrooms and added flooring and paint to the entire house.
After calling about 20 banks and mortgage lenders I found one willing to c/o refinance @ an 80% LTV with a 5% interest. This would reduce my monthly cash flow by $150, but give me 18k or so after closing costs.
The 18k combined with my current savings would free me up to purchase my next rental now. Otherwise I will have to continue saving and wait until around January for my third rental. What would you do?
If it helps, I’m 25 and my ultimate real estate objective is to generate a medium class salary equivalent through cash flow by age 32. So even though this would cut into my cash flow today, could it potentially increase my wealth and future cash flow.