Hey there BP forum! I hope you are all chasing your dreams and making things happen. I need some direction or advice on best approach to funding my first investment property. My rookie REI journey has provided me numerous situations where analysis paralysis has eaten up a great deal of time and progress, I'm there again. I am looking to do a cash out refi on a second home I own in PA to invest in Charlotte, NC.

My credit and income are good to go and do not create any barriers. The below is based on refinancing from 11 years remaining on a 15 year note at 4.25%, $1860/month PITI.

Conventional Lending:

OPTION #1 5.375% on a 30 yr. at 60% LTV providing $130K PITI $2178/month *** No appraisal needed

OPTION #2 5.875% on a 30 yr. at 75% LTV providing $185K PITI $2563/month *** Appraisal needed

I found a quadplex for $505K with positive cash flow. I backed out the monthly note, 5% for vacancy, 5% for break fix, and 8% for PM and net out $650/month. I could pull this off using OPTION #1and have this one location to kick things off. Or, use OPTION #2 and buy a 3/2 SFH in addition to the multiunit. I likely would be net neutral on the SFH but garnering the potential appreciation of the Charlotte market.

Here are my points of contemplation:

- I don't want to overextend myself by taking out the 75%. When it is all said and done the new mortgages on my 2nd along with the multi unit and the 3/2 would be net neutral. I am okay with that but would be digging into my own pockets for those surprises that present.

- The refinance process is a nuisance and costly. If I am doing it now I may as well take full advantage of it and pull out as much as I can. Downside is that I would be $700 more per month out of pocket.

- Having 40% equity is nicer/safer than 25% equity. My parents live in the PA property so I want to ensure things stay copacetic.

- Appreciation on 3 properties has a great deal of potential upside.

- If I don't do it now it sets me back from scaling up in the future.

- Should I be considering alternatives to conventional lending? Between my primary home and 2nd home I have about $625K in equity with great credit and income. The quadplex is fully rented with leases and deposits that convey.

I believe David Greene would be all in. Am I wrong? I don't have an overly specific goal as things sit today due to the general uncertainty of the financial environment we find ourselves in. I do however want to scale up responsibly while embracing a sense of urgency. I feel pretty confident that the market here in Charlotte will be pretty stable and continue to grow. I am in my late 40's and want to take advantage of my resources. What thoughts do you have? I would love to hear a few perspectives. With Great appreciation!

Charlotte, North Carolina

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