Cash Out Refinance Deal
Hi,
Just wanted to share my last transaction, in case it helps anyone.
I bought a house in one of the older parts of town for $77K with a Conventional loan that required 5% down payment, with a mo thly pmt of $760.
The house's AC unit didnt work and had to be replaced, and in general the property was very ugly inside out. I renovated the entire thing, floor, kitchen, bathrooms, all rooms, etc. The before and after is simply outstanding, the house looks old from the outside, but very modern inside.
So, just to put numbers out there:
$77K Purchase price
$23K Rehab (materials ,labor, other fees)
$100K Total Acquisition Cost
I then went to a local bank, because all other big banks didnt allow for a cash out before 6 months. So, the local bank agreed to work with me, and the property appraised for $125K, and they will give me 80% for the cashout. The closing costs for the refinance are approx $3K, and my monthly pmt only went up $6 dls!!
I'm closing this monday, and couldnt be happier, as I practically paid nothing to acquire a fully renovated property, still own 20% of it, and have cashflow.
Final numbers after cashout
$766 monthly payment (only went up $6)
$1,100 potential rent
$334 cashflow (not counting maintenance)
+ $100K 80% of appraised value which is 125k
- $3K closing cost
- $73K previous loan
= $24K cash going back to my bank
So, I could say this property cost me -$1,000 to acquire, making my ROI infinite! And still having 20% equity!
Happy investing to everyone!