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Updated 5 months ago on . Most recent reply

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Mary Pastoral
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21
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Which financing to choose

Mary Pastoral
Posted

Hi BP community, which one would you advise to be the next move for financing of next investment property, given the following options: 

1. Get a business line of credit for a single family home owned under our LLC. Property is used as a short term rental. Fully paid. Current Zestimate of 209,000.

2. Refinance our first investment property. Owned under our names, bought in 4/2023 for 110,000 (placed 25% down; interest rate 6.625%)  ; current Zestimate of 123,000 (very low appreciation, but currently cash-flowing long-term rental). Currently rented until June 2025. ]

We have bought two more long-term rental properties in 2023/2024 but those were purchased February 2024 and July 2024 so plan on not touching those yet for refinance.

3. Refinance current primary home. Bought 9/2023 for 425,000 (VA loan with 0% down, interest rate 6.25%) ; current Zestimate 445,000.

Thank you. 

  • Mary Pastoral
  • Most Popular Reply

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    326
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    Carlos Valencia
    • Lender
    • 92703
    536
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    326
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    Carlos Valencia
    • Lender
    • 92703
    Replied

    Hi Mary, 

    It seems its best to cash-out refi on your single family that is being used as an STR. Since its fully paid Cash-out Refi would be the better route to go than a line of credit like a HELOC. You will get a better rate when getting your money via a cash-out than heloc. By the way what market are you in all 3 of your properties seem pretty low in price allowing you to have positive cash flow.

    @Albert Bui @Matthew Kwan

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