TO REFI OR NOT TO REFI THAT IS THE QUESTION

[Mike Taravella]

Hello BP Nation!

I currently have 2 properties and was wondering if it make sense to refinance and try to get another property. From my research ideally you would want a 70% LTV as a portfolio. I am worried I would be too leveraged going into a third property but would love some insight. Below is the details of my properties:

• Property 1:
  • Purchased in May 2016
  • Original Purchase Price $63,000
  • Remaining Mortgage: $28,000
  • Current Market Value: $85,000
  • LTV: (28,000/85,000)= 33%
• Property 2
  • Purchased in November 2017
  • Original Purchase Price: $100,000
  • Remaining Mortgage: $84,000
  • Current Market Value: $105,000 
  • LTV: (84,000/105,000)= 80%
• Total Portfolio LTV= (110,000/190,000)= 58%

Thanks in advance!

[Harjeet Bhatti]

@Mike Taravella  You can cash out from property#1 because there is equity in the property under conventional loan. Property# 2 doesn't have any equity.