Updated almost 2 years ago on . Most recent reply
Looking for some guidance
Just picked up a property for $170,000. Put about 45,000 into the rehab. I put 25% down about (50k) @ 8.1 interest rate. New ARV is about 265k, property is going to be rented shortly and should cash flow about 900 a month cash flow.
My question is, should I cash out refinance or do a HELOC or line of credit for my next project?
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What are your goals? this is at the heart of being able to answer the question. You also need more analysis than this like how much money could you HELOC vs how much cash could you get if you refi.
Furthermore, what would the interest rate be if you refi? What would your new cashflow look like if you were to refi? would the reduced cash flow from the refi be worth it to you?
Understanding you want to increase the velocity of your investments by pulling out cash and reinvesting it. I think it would be worth stating you'll get a similar amount of cash regardless if you refi or HELOC, but you'll short term cash flow more with HELOC since you're only paying interest for the next 10 years. if you refi you will pay interest and principal which will decrease your cash flow.
$900/month is a great cash flow, but is that pure rent minus mortgage?
I know this is a lot but I hope it helps!