Hello, everyone. Working on the final step of just BRRR strategy and working on a cash out refinance. I have a couple of options I need help with.
6 months ago I purchased a triplex for 200K, spent 40K fixing it up and now it's valued at $320K. Did conventional financing and put 25% down. Now I'm at a crossroads as to which refinance product I should go with.
1. Do a conventional 30 year refinance and get $66,671 cash out. This would put my mortgage payments at $1,118. This loan would be at 70%LTV.
2. Do a 5/1 arm @ 80% LTV and get $103K in cash out with payments at $1,790. Then six months later do another refinance to a conventional loan with a lower interest rate to bring my payments back down to around $1200. This allows me more cash up front and I can refinance within a few months.
The all in INCREMENTAL cost (including closing, and additional interest for 6 months) is $8,897 to get an additional $37K in cash out.
So... Is it worth it? Would love to hear your thoughts and ideas. Thanks in advance.
I am in a similar situation and I am waiting to hear what responses you get.
The 2nd one sounds better to me, however I don't have experience in this, so someone with such experience could answer you better