Best way to get money out of property without selling?

[Andreas Blomst]

Hi all, Another question brought on by my excess of equity. I have a $350k property that is a SFR free and clear that has a 5 year rental history currently at $1700/month. Also have a primary worth $720-$750k and only a first at $470k. It has a 150sq ft studio on property that brings in $1100 a month (Santa Barbara CA). I would like to buy an other rental with my equity for around $200-250k.Any advice? Best way to do this? Stated income products a plus because I am a small business owner.

[Bill Gulley]

Only 2 ways to get the cash out of the walls, by selling or financing. That is to cash in hand.

However, if you look to seller financing as a solution to your next purchase, you can give the seller a collateral interest in your other property. You might do the same with a second mortgage on an additional property. An assignment of collateral can reduce the loan to value of your new or subsequent loans. 

There could be other creative solutions with the right partner or seller, just realize you have something of value.

You can also give a bank a second secured interest with a blanket loan, You might get bank financing at 100% of the new purchase as the total loan to value on both properties can be well below what the require for a purchase mortgage. 

As to refinancing, generally you'll be looking at about 75% of rental income as a qualifying payment, plug that in along with the term, say 15 years and their interest rate and you can solve for the loan amount you can expect, regardless of the loan to value being lower than 70/75%, cash out refis generally don't go higher on investment properties. The only way to know is to ask! Good luck :)