Let’s say I bought a house cash. I rehabbed the house and I’m the property is now rented. Can I do a cash out refinance? If so, how does happen? Thank you
Investor · Omaha, NE · Member since 2021 · 244 posts · 163 votes
3y
@Arthur Nogueira What Bill said is correct, you can do a cash out refinance on a fully paid-off house. Go to your local bank/credit union and ask them for the same. Typically, they can give you the lowest rates
However, another option that may be more beneficial is getting a LOC (line of credit) secured by the paid-off house. Unlike a cash-out refinance, you pay for the funds as you go and it functions as a credit card (rather than a mortgage), giving you more flexibility over the funds secured via your house and is potentially cheaper than a mortgage since it is not amortized. Additionally, this will be easier to get than a mortgage in this case since this LOC is in first position
Let’s say I bought a house cash. I rehabbed the house and I’m the property is now rented. Can I do a cash out refinance? If so, how does happen? Thank you
We do this all day long and it's a great way to grow and scale. Another option is to buy an asset with a fix-and-flip loan where you just put a portion down for purchase and get the rehab funded. Once the work is done and you want a 30-year fixed rate you just refinance, pull out your cash and do it all again and again !
I just did this. My cash flow was only $1200/month with my paid off rental. I did a cash out refi on it and bought 3 houses with the cash. Now my total cashflow is $3500/month and I picked up 3 houses basically for free, not costing me any money out of pocket. I actually had about 30k left over that I didn’t use. I’m a fan of using equity just sitting there doing anything for me.
Could you please give the bank that you used for this, and approximately how much was your monthly payment?