Is this right?

[Josh Williams]

The original plan, and hopefully still is to cash out refi current home. I can cash out 90%. Currently owe 101k and would refi at 135k with 3.73% APR. Leverage equity into another property down the line after getting tenants. Reuse VA for a primary residence.

The Mortgage+ Tax&Insurance=$770 monthly

Projected rent $1100 monthly

Monthly total for later maintenance and vacancy 15%

$1100-770-15%=$3366

$3366/135k= 2.49% CAP ?!?!?!?!

Home is currently worth $150k

Did I do this right? Is it even worth it?

Please help.

[Steve Vaughan]

Hey @Josh Williams . I see you want to re-use a VA loan, so you must refi out of it to do that. It that wasn't an issue, you may be able to obtain a HELOC. Less initial cost, but higher and variable rates. About your cap rate number, your ratio is correct but you need to exclude debt service. NOI is the number (effective gross income minus expenses) you divide by value (or price). It doesn't mean much with single-families, but is always good to practice!