Cash out advice on rental property

[Sal M.]

I own a SFR in Union city, CA. Its market value is 1.1Million. I have a 30 year fixed mortgage at 3.375% on it. Outstanding balance is 470k. I have been renting it out in the range of 3500 to 3900 per month for past 5 years. I want to take out some equity from it and invest in rental properties. Whats the best way to do that? And how much can i take out ? I had paid 750k for it in 2005. I am guessing it has to be a cash out refi , because HELOCS are hard to get on rented homes. I spoke to a mortgage officer from chase bank, he said i can get 200k cash out, and the new loan of 670k will be a 7/1 arm at 3.875%. Getting more cash out puts you in the jumbo loan category and thats hard to do. For HELOC, he said thats very risky and he will not do it. I have good W-2 earnings and a 800+ credit score. Please advise and recommend any bankers, brokers who can help me with refi or heloc so i can cash out my equity. Thanks

[Daniel Dietz]

Someone else mentioned the relatively low 'rent to price ratio'. With your 600K in equity you could buy about 2.5M of rentals in the midwest that would bring in about 25K per month of 300K per year. That is not for 'fixer uppers'. That is 10-20 year old duplex and fourplex that are relativley low maintenance. Plus you would have approximately 100K per year of loan paydown and appreciation. 

Are you sure  that your potentially higher appreciation in your market outweighs the relatively low rent?

Just food for thought.

Dan Dietz