Current Cash out refi costs and rates … HELP

[James Brisson]

Hey all, so I'm currently in the process of doing a cash out refi on one of the triplex's I own in Fitchburg, Ma. I have a rate of 3.75% Current PITI is 2180 and other expenses monthly are roughly $200. Gross rents are 4550 so cash flow is roughly $2100. ( yes I know I need to factor in cap ex. Maintenance and vacancy to get a more accurate number). I would be able to pull about roughly 100-140k (appraisal depending) with a new piti of $3960. The rate would be in the mid to high 8's. My goal is to scale the portfolio and hopefully be able to replace the lost cash flow by adding additional units with the cash out proceeds. The closing costs would be 19k with 5k in prepaids, with 14k in closing costs including broker fees. Is this competitive or does this seem expensive to you? Also the cashout refi is a no income low doc loan that looks to the DSCR ratio of the building for qualification along with my credit score. Details for closing costs are outlined above. I'd appreciate ANY feedback positive or negative !!!! Thanks guys and gals !!!!!

[River Sava]

Hey James - Happy to connect and take a deeper dive into this. Would need a bit more info. I am also from Newburyport if you know the area. 

[Wyatt Wolff]

I definitely think that you should get some opinions, but ultimately, if you have a use case for the cash that gives you a good ROI, then go for it!

[Erik Estrada]

Quote from @James Brisson:

Hey all, so I'm currently in the process of doing a cash out refi on one of the triplex's I own in Fitchburg, Ma. I have a rate of 3.75% Current PITI is 2180 and other expenses monthly are roughly $200. Gross rents are 4550 so cash flow is roughly $2100. ( yes I know I need to factor in cap ex. Maintenance and vacancy to get a more accurate number). I would be able to pull about roughly 100-140k (appraisal depending) with a new piti of $3960. The rate would be in the mid to high 8's. My goal is to scale the portfolio and hopefully be able to replace the lost cash flow by adding additional units with the cash out proceeds. The closing costs would be 19k with 5k in prepaids, with 14k in closing costs including broker fees. Is this competitive or does this seem expensive to you? Also the cashout refi is a no income low doc loan that looks to the DSCR ratio of the building for qualification along with my credit score. Details for closing costs are outlined above. I'd appreciate ANY feedback positive or negative !!!! Thanks guys and gals !!!!!

 Hey James, 

You may be able to structure this on a DSCR second position loan, without having to touch your first.

You may also get the rate in the low 7s doing a refi on the first if you have an excellent FICO. 

[Jonathan Taylor]

@James Brisson 8.99 seems very high without knowing the specifics on the property other than what you sent. Market is mid 7s to mid 8s from what I have been seeing. I would run the numbers on a second position to keep your first rate and the blended rate may be lower than 8.99. This is a way to 1. pay lower origination since you are taking a loan for 100-140k and 2. keep your first note rate in place. 

Would take some noodling, but would be worth it considering the jump in rate. 

[Elias Halvorson]

VERY high fees for only pulling out 100-140k. Have you considered a personal loan from a local credit union or from SOFI? I know SOFI does personal loans up to 100k with a document fee of maybe 300 total And interest rates at 8.75-12%. Without knowing your complete financial situation. That would appear to be a better deal vice doing a cashout refi on your 400k and going from 3.75 to 8.99% on the entire amount.