New Investor looking in Denver

[Eric Dupuis]

Hello all, new investor here looking to get in the game. I bought a house in Arvada three years ago which I now rent. I cash flow $650 on it with my current loan. I just had the house appraised for $495K and I owe $339K. Is it advisable to refi with cash out or line if credit to buy another house? The Denver market seems competitive but I like the BRRR method of investing. In Denver, it seems like the $100K-$150K single family homes are a thing of the past so it seems I'll need more money to start than the $30K-$35K everyone talks about. Am I late in the game or are there still pockets to invest in?

Thanks! 

[Chris Lopez]

@Eric Dupuis

You said, "which I now rent." - Did you use to live there as your primary residence? if so, was it longer than the 2 year rule to exclude capital gains?

It's hard to give you a detailed answer without knowing a lot more about your situation.

Is it advisable? Depends!! If you're able too, sit down with a loan officer and agent to run through different scenarios. If you're able to exclude capital gains, one can make a strong argument to sell that property and redeploy the capital for better investments.

What type of rates are you looking for a refi?

What type of cashflow are you looking for on your rentals?

The Denver market is tight, it's difficult to find properties where you can do the textbook BRRRR of where you pull out all of your original capital.

Chris