I want to do the refinancing for one of my property, I purchased it a year ago for $220k with mortgage around 150k, now its market value is around $300-$320k. If I do the cash-out refinance, I will get at least $80k. What can I do with this money to maximize my return of the cash-out? Should I use this money to purchase a new property with all cash offer of $80k or using this 80k as a down payment to purchase a larger property such as a multiple family or commercial property?
Lender · Winlock, WA · Member since 2020 · 124 posts · 82 votes
4y
Reinvesting is a great strategy to get your money to go a bit further. There is no right answer as ROI is very much dependent on each property.
An option you didn't but that could be very useful to you is if you do a HELOC instead of a Cash-out Refi. With the HELOC you will only being paying on what you use. If you find a 1-4 unit you want to purchase but the down payment is only $50k you only pay interest on the $50k used rather than on a Cash-out you will raise the rate on the property above that of a Rate and Term Refi and pay for the full $80k you pulled out at closing.