Seeking suggestion on first rental property

[Shuo Wang]

Hi All!

I was planning to buy my first rental house at $300K with 50% down, and after just talking to a banker from Chase private client, there's seem to be a better way to do that.

My current primary house:

Value: 1100K

own: 560K

rate: 3%, started at 08/2016 with 7/1 ARM

Investment house:

Price 290K

If I take another loan for investment house, the rate would be 5.00 for 30 year fixed. And the banker told me if I join Chase private client, they can do a cash-out refin on my current house and extract $290K out of it, so I can pay the investment house all cash, and they can do 3.75 for a 10/1 ARM loan.

Should I do it? The benefit I can think of is that I'm getting a much lower rate because it's my primary house, the cons is that I'm taking a big loan, and even it has lower rate, the principal is much higher.

My current interest will be 560K (rate of 3) + 150K (rate of 5, if I put 140K down), if I do cash out refin, it would be (850K rate of 3.75)

Any suggestion is appreciated!

[Justin Larese]

Appreciation potential is difficult unless you are forcing the appreciation through fixing and updating. Natural appreciation should be the butter, not the bread of your profits.