I now have 3 rental properties and one primary. Two of my rental properties are doing amazing and 1 of them is a money pit. I am at the end of my rope with spending. I went ahead and started the process to refinance 1 of my investments houses to get some cash to get the bad property up to par. I have excellent credit I'm just wondering if I making good decisions. When I project my budget out 3 years it looks like I'll be making a decent living. But right now I'm up to my eyeballs in expenses. This refinance will get me out of the red. I can pay off debts and might even have enough money to get another investment property.
as we draw closer to the closing date I'm getting cold feet. is refinancing a smart decision?
Hello @Ellen A. Only you will really know the numbers to see if it works out. If you take cash out and still cash flow then I don't see why not if it get you out of the red. But to me, it sounds like you would be better off just selling the money pit and let someone else take care of it. Why hold on to something that isn't benefiting you?
@nicholas Covington it's hard to know when to give up. I have another house in the same neighborhood that's got appraised for 20k more since the 1st appraisal in October 2017. I do believe the house will increase in value. we just closed in March. we get more monthly in rent than the mortgage payment. I think once we get it fixed it will make money long term. just not this year. :(
what are your thoughts on refinancing to pull equity out to buy another property. ?
I appreciate your feedback back.
I still don't get how to use the @Nicholas Covington to tag people
I don’t think it is a bad decision. Maybe get the house up to par and sell the money pit once ready? Or hold it to hopefully recoup your money at some point? Take it as a learning lesson.
At this point what other choice do you have? A foreclosure will hurt your credit for a long period of time and destroy your credit. If you can sell and break even maybe consider that?