Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
7y
@Sunshine Bizz - Definitely look into a cash out refinance. Push for 80% LTV if you can find it, but obviously go with whatever LTV you're comfortable with. You'll get most of your cash back out of it so you can buy something else.
Rental Property Investor · Raleigh, NC · Member since 2017 · 157 posts · 169 votes
7y
@Sunshine Bizz totally agree with the responses. But here is something i noticed, and it might already be your plan or might not, so i will mention it.
What really stands out to me, is your Property #5. You virtually have 120k cash available and you also already hold couple of properties under 100k so you must be comfortable with that.
So here is what i would do in your case.
I would use your HELOC and find a distressed property and buy it cash. Find something that would normally not qualify for typical conventional loan and that needs fast closing. You can get pretty decent discounts doing it that way over a typical buyer that needs to get a loan. Then use the rest of the heloc to rehab. If you do this right, you should be able to refinance it after you are done and pull all the money you put in including the rebab cost back.
You will end up with a great rental property with 70-75% LTV and your original 120k HELOC.
This is a great model that will give you unlimited and very scalable way of acquiring properties. You can probably do 1-2 properties like that every year and be very comfortable with it. Still keeping all your cash and getting couple of properties with no cost to you and your renters paying the loans / equity.