Refinance and pull out your dead equity asap. The opportunity value of your dead equity is eating all your cash flow and turning your investment into a liability.
Originally posted by @Darrell Smith :
Hi I have a question about a HML that I obtained for a sIngle famIly investment, should I use a refinance to payoff loan or is it possible to get a heloc to payoff ,the loan from HML is for 75k ,property appraised at 196k .
HELCO will have higher interest rate compared to normal investment loan that you can get.
You will actually end up with some cash. See simple cal calculaton below:
Cash received when refi = 196k* 80% LTV = 157k
Cash after HML payoff= 157k-75 = 82k
Cash after refi fees= 82-2k= 80k.
You will end up with 80k that you can repeat the same process again.
Good luck :)
Thank you everyone for the advice, I will be closing next week with Quicken refi at 5.25% rate payment on a 75K loan plus all closing cost included 85k payment is 741$ including tax, insurance, principle and interest no money out. Property is rented out at 1650$ net 909$.