Refinancing to buy another rental property
I purchased a home last year that I rent and I would like to refinance it to purchase another investment property. The interest rate is currently 3.75 and will increase to 3.875 with the refi. My cash flow will be reduced from $1100.00 to $500.00 but I may be able to cash out about $70K for the next investment. I am a little concerned about the cash flow. I am a Pro member and I need help figuring out if this is a smart move or not. Can someone help me, please? Thank you.
Most Popular Reply
Hey Sarimar,
If you investment property is separate from your own finances. In other words, it is self-reliant and pays for itself, I would say it would be worth it if you can purchase another cash-flowing or property. It will take you just under 10 years to save up $70K with your missing cashflow. In that time you can build 10 years of equity in another property and quite possible repeat the refi-to-purchase strategy again.
Being from Tampa also, you will probably know that you cannot find a 200-250K multifamily (especially not cash-flowing) here as mentioned by Joshua.
Good luck! Interested to hear what you choose to do!
Also, did you get those rates from an actual lender or online marketplace?