Refinancing

[Blair Murphy]

Hi,

I need advice from the seasoned vets in here. I have a property I bought last year in February in the Sacramento area for $232,000 on a 30 year fixed at 4.1%. It just started cash flowing which I am ecstatic about. I am following the buy and hold strategy and looking to use cash from a refinance on the mortgage towards another property.

I was contacted by a mortgage loan officer regarding refinancing to which after I gave the information requested on my property, I received: ''On a non-owner 4-plex to do a cash-out loan, the maximum loan to value is 70%. Based on a $232,000 value you wouldn’t be eligible yet to take out any cash as 70% of that value is an amount less than you currently owe.'' 

Admittedly, I'm new to the game and everything is a ''first'', however, when would someone in my position be eligible to refinance and put that money towards another property (and so on and so on)? It seems from everything I've read that you buy a property, wait a year, refinance, put that cash towards another property, and rinse and repeat until you've reached your goal (whatever that may be). I can't help but feel like I'm falling behind a bit which is worrisome but I really don't see any other way of doing this other than buying and holding in a place like Texas or somewhere else where the property values are so much more user friendly which doesn't seem like a viable option. Being in California, should my expectations on this popular strategy be different (i.e. in reality it will take longer due to housing costs in CA)?

Thanks in advance!

Best,

Blair