I’ve had a hard time with financing

[Paul Eddy]

So I'm a new investor and just closed on my second STR property. The problem I'm having is that I carry a high credit card debt and had to get a co-signer for this property and almost didn't make it. Does it make sense Cash out refi one property and use the equity to pay the debt down or keep that equity in place for the next deal. I'm not convinced I'd get approved again given my DTI( I don't have a very high paying w2). Any advice would be helpful I am currently investing in the white mountains New Hampshire and want to do more STR and eventually scale into long terms. Happy to be a new part of the community!

[Matt Herbert]

@Paul Eddy, I'm not a lender, but I don't think that would necessarily help - and could even hurt. You would just be trading one debt for another.

It depends largely on the monthly payment. If the cash-out refi payment is significantly lower, then it may help. However, when they calculate the payment on Credit Card debt, they use the minimum payment (typically CC companies charge between 1% and 3% of your balance as a minimum payment). So, often, CC minimum payments are very low (intentionally to keep you in debt longer, and make the company more money). Thus your cash-out refi may actually have a higher monthly payment, which could hurt you.

Also, are the lenders counting any of your Rental Income? Different lenders have different rules on that, so you may want to shop around and see if you can get a more investor friendly lender.