Cash-out Refi or Line of Credit

[Kevin Akers]

Hi everyone!

I have a quick question and would love to hear your thoughts. If you have a couple of rental properties with some equity, and you're looking to tap into that equity to fund more investments, what would you do? The current loans on the properties are with a bank that offers a flexible rate, which has recently increased. Would you consider doing a cash-out refinance into a 30-year DSCR loan, or would you opt for a line of credit instead?

[Elias Halvorson]

Quote from @Kevin Akers:

Hi everyone!

I have a quick question and would love to hear your thoughts. If you have a couple of rental properties with some equity, and you're looking to tap into that equity to fund more investments, what would you do? The current loans on the properties are with a bank that offers a flexible rate, which has recently increased. Would you consider doing a cash-out refinance into a 30-year DSCR loan, or would you opt for a line of credit instead?

 Hi Kevin, 

I would look into both. Local banks/credit unions typically offer the best HELOC rates, but few of them offer investment HELOCs. A DSCR Cashout refi would get you the cash you want but you will pay points, have a 1-5 year pre-payment penalty, etc.