Cash out re-fi or new investment loan

3 Replies

Ive got shallow pockets currently, looking to make my first deal in the next six months.  I own my primary residence and have $200k of equity, maybe a little more.  I also have a $70k in liquid savings and the ability to obtain a conventional loan.  What strategy would you use to finance your deal.  Cash out re-fi on the primary residence + savings or just take a loan and put 20-25% down to make the deal. 

Pros and Cons of each method please.  

Thanks for your insight!

@Ken Vogel A conventional loan costs you at least 3% in closing costs. Forget that! Look at the Line of Credit against either property. Costs are less, more flexible terms. The line is put against the house just like a 2nd, so no difference there. Only pay for what you use and put it back. TD Bank has a pretty cool program, $99 origination fee, $50 annual fee, 75% LTV, 4.49%. There are lots of LOC options for a primary residence.

Once you get the new property, get a note on it and put the funds back into the LOC. You can get Buy-Fix-Flip or Buy-Fix-Rent terms easily, with 640+ credit out there. No reason to put your savings at risk. Best of luck to you.

@Jack Bobeck Thanks for the reply.  Can you clarify what you mean when you say, "Once you get the new property, get a note on it"  

Are you saying re-finance it?

Thanks again  

Originally posted by @Ken Vogel:

@Jack Thanks for the reply.  Can you clarify what you mean when you say, "Once you get the new property, get a note on it"  

Are you saying re-finance it with a traditional fixed rate loan or are you illuding to something else?

Thanks again  

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