BRRRR when your rate is already low

[Sarkis Gezalyan]

Hi everyone! I've been reading about ways to acquire a second property while holding on to my primary residence, but there are so many people with so many different ideas. Some complicating, some simple. What doesn't make sense to me is that at this current time, rates are so low that a cash out refinance isn't going to seem possible for a long time if you already bought a house at these incredibly low rates (am I correct here)? So to purchase my second property, which I will treat as an investment and rent out, what would be my best option? I've looked into HELOCs, but the fact that they have the repayment period and variable interest rate isn't going to help me out with cash flow when it comes to the high Los Angeles pricing. Thank you for the responses ahead of time!

[Todd Rasmussen]

@Sarkis Gezalyan

When you are getting started, .1% difference in interest rate seems important. Most experienced investors would pay 2x-3x current rates without flinching because their returns are so much greater. Today, if the interest rate is under 10, I am not batting an eye. 2.5 years ago I shopped a 4.something refi rate across three banks and went through the trouble to leverage offers back and forth between lenders. HELOC is for accessing temporary capital. If you are looking to tap equity and put that money into another property, a fixed rate cash out refi is almost always a better decision.