What next? Cashout refi?
I am coming up in 2 years of a LTR cash flowing $600/mo. I have roughly 100k equity in the property.
I can refinance and pull out cash but lose the cash flow piece. The initial plan was a HELOC but banks are no longer doing them for investment properties.
What should I do?
depends on your investment strategy. If your strategy is high cash flow then refi may not be the best option since the cashflow will decrease. If cashflow is not the priority right now but acquiring more properties is, then a refi may be the best option so you have a nice chunk of cash that be used to purchase something else.
If you go the refi route ensure you do the math to ensure the new monthly payments don't result in a negative cashflow on your property.
@Jonathan Brewster - depends on what you're going to do with the cash you get from the cash out refi. If you use it to make renovations on the property which will then lead to higher rent and higher property value it could make sense. If you're going to use it as down payment on another rental property that cashflows, just do the math. How much extra cash flow, principal paydown, projected appreciation will you get from that additional property? If you're using the cash to buy a boat or blow on materialistic things....not smart. Keep in mind, the money you get from a cash out refi is not income and the interest is tax deductible so it is much much more powerful than any income you could earn through salary.
