Cashout VS more cashflow
Bought a property at auction with a 7% HELOC for $135K. I will have less than $5K into it.
It should appraise for $210K easy but will shoot for $215K .
Could rent it for $1600.
PITI should be around $1140 if I take out zero $$ and just pay back the HELOC.
My HELOC is $465K.
OR
Do I refi, take out all the equity I can $26K (got have 25% into it, correct) and payment is around $1350?
My thinking is take the $26K as it would take me 10 years to accumulate $26K at $200 extra a month!
Most Popular Reply
@Michael Hites This is either a homerun deal or you're numbers are way off.
A $5,000 renovation does not equate to $80k worth of value-add. I'm sure it happens but it's rare and we haven't been fortunate enough to buy "no brainer" homerun deal. Maybe I'm misunderstanding the numbers.
What did you mean by "take the $26k"? A lender checking you a check for $26k at closing? Unlikely. This further validates my issue with the numbers, but we're not in your market and these are opinions.
Idk your experience level but I would not over leverage this property on the refinance. If that means leaving $26k in the deal do it. This market is unforgiving, you need equity, and need reserves to the keep the engine running.