Equity in primary residence for first rental

[Omar Johnson]

Hello All,

My wife and I are newbies and are looking to get into the rental/flip market here in Charlotte, NC. We were thinking of doing a cash out refinance on our current primary residence to fund our first investment property. We’ve been reading a ton and the BP podcast have been very informative, but we really don’t know if this is a good idea to get our real estate investment business going. Any feedback and/or suggestions would be welcomed!

Thanks so much for taking the time to read this!

Omar Johnson

[Doug Wright]

Depending on the terms of your current loan, interest rate, payment, remaining term, etc. Instead of a cash out refi at current rates it may make more sense to get a home equity line of credit or home equity loan. Yes there is a little more risk with a HELOC due to fluctuating interest rate but if your current loan has low fixed rate and new loan would increase that it might be a better option.