Cashout Refi vs Seller financing

[Tudor Francu]

Hi

I bought a 7 unit building 2 years ago cash. Id like to get equity out to acquire more assets. Building is producing on average 15% annual return. I have 3 scenarios;

- cash out refi for 75 % LTV at 5.5% rate for 20 y amortization with ~15k closing costs - still keeping the asset and cash flow

- sell the asset with seller financing to a new owner for 25 % downpayment and 7% rate - getting some money back and making 7 % on the rest, but no asset

- not doing anything, run on present cashflow, and have all cash blocked in there .

Any thoughts/ advice/solutions? TIA 

[David Shakhunov]

I would look into opening a HELOC. You will have 80% value of the property value at your disposal.

PROs: You don't need to draw all at once. You can draw any amount you need. Lower payments for the first 10 years (interest only). You pay interest on the amount drawn and when you draw it.

CONs: Variable interest rate. You might need to refi the newly purchased property.