$450,000 in equity, what do I do?

[Eric Healy]

Hello BP!

I have a good problem. I have a SFH rented out in the Seattle area, about three miles from Amazon's HQ. It has gone up a lot in the last few years. It now has about 450K in equity. I have it rented and cash flowing a small amount. I know it's bad practice to have so much equity in one place and I should refi and buy more. The problem is I have a 3.7% fixed rate on it, so a refi would be much higher at this point probably eliminate the small cash flow. Any ideas or advice would be appreciated!

Best

[Jay Hinrichs]

Originally posted by @Eric Healy:

@Bjorn Ahlblad great thanks, doesn’t this make it hard to find a cash flowing property that can pay both debt services?

yes !! you could play the arbitrage game and borrow at 4 or 5 on your heloc then use those funds to invest with a really good HML in Bend that is doing short term flips probably make 10 to 12 gross and net 5% to 7% on your arbitrage..

or you could just use the money for quick turn and burns.. if you have the band width to do those.. 

I would personally be reluctant to take on debt to just buy 100 to 200 a month of cash flow unless it was a property I had a pretty good idea was going to have a run up in value.  Also did you live in it for 2 of the last 5 years if so might be a good time to simply exit and get tax free 450k.. then use that money to buy a small mulfi family with 30% down so your not leveraged to your eyeballs.