All Forum Posts by: Spencer Tanaka

@Ben Rhodin will do! Appreciate the help. That’s precisely what we are looking to do. We are planning to house hack in Denver and the extra money for a down payment would help us enter into a home that is house-hackable from the get go. Just another point of consideration for us.

@Ben Rhodin appreciate this response! It is exactly where my wife and I are at and I essentially do need to truly figure out what the cash-out will be used for. These responses help validate that I’m on the right track and not missing another scenario to consider.

@AJ Satcher that has definitely been another thought! We're seeing good success with this property as an STR. About 18% COC return and the area is being highly developed around it.. so current plan is to hold since we're cash flowing. Pulling the equity out would hurt the cash flow though since my mortgage would go up significantly.

We bought in late 2021 so we do not have any obstructions to refinancing. Seasoning period is a year now though I believe instead of 6 months.

@Mark Munson thanks Mark. The main purpose is actually to do two things with the cash… help fund a new primary in Denver, CO and to assist with the down payment we need or to purchase a new rental in Indy as a SFH or STR. To your point, I'll need to do a deeper analysis on the payoff of the $40K I can pull out to see if it is worth it, but was initially posting for a gut check.

I keep hearing that rates will drop end of Q3/Q4 from my lender…. Not to pandemic levels, but I could stomach a 5% rate better than 7.6%

Hi Everyone,

My wife and I bought a duplex and started a renovation in early 2022. At that time we had a 3.8% interest rate and our intention was to BRRR the property once completed - well, right as the remodel was finishing up rates started to go up. I have not done a cash-out refi yet, but we've got about $40K in equity sitting in this home. My quote to do a cash-out refi is to move our interest rate to a 7.6%… double what we bought the home for and our mortgage+escrow goes up about $550/month.

How do you look at whether the money now is worth more to you than taking the hit on cash flow? I’m stuck on sitting and waiting for rates to go down vs. taking the cash flow hit, but now I’ve got $40K to roll into another property.

Would appreciate any advice or thoughts if you’ve been through this!

Thank you, Bill I will do that! 

Hey Greg! Appreciate the reply. This is really helpful. I thought the same as well - I think my only thought was maybe updating my insurance policy as well in case something bad happened. But outside of that… I really didn’t see a reason to spend the money. Thanks for confirming these thoughts!

Hi everyone! First post here... My wife and I bought a duplex in 2021 that we were fully intending to BRRR, but after the rehab was completed, interest rates shot up. We locked in our initial mortgage at a very low rate and right now, if we were to do a cash-out refinance we wouldn't be able to get as much out as we originally wanted. We are using both sides as a STR and after we pay off the remodel it'll be an 18% COC return. We're fine leaving the equity in (right now)... this leaves me with my main question:

Since we aren't doing a cash-out refinance is there any reason to get an appraisal completed on the newly remodeled property? I can't seem to get a good answer on this from my current network and hoping others may be able to provide some insight. Thanks!