When is the right time to refinance and cash out?

[Eddie Sorrell]

I have the opportunity to close on our first four-plex tomorrow! When is the right time or is there a minimum amount of time I need to consider before a refinance and cash out to invest in next property. Our goal is 20 doors in 5 years or less. Scenario: Purchase price 260,000 Loan amount 208,000- yes the cash required hurt me a bit... Property appraised @ 325,000 Current cash flow 400 after all mortgage, insurance and operating expenses Opportunity to raise rent with new lease terms for additional $400, which could lend to $800 per month cash flow. Given this scenario and that I have a 25 year amortization with floating rate when would you refinance?

[Account Closed]

@Eddie Sorrell that's basically what NPV or Net Present Value is... put simply, what's the average (or desired) ROI I get on my dollar, and how much above or below that ROI target is every asset I invest in. You want to land above it as much as possible!

I would def say sell for another property and extract the entirety of your equity if the ROI on this property is going to drop below your target number and you can do better elsewhere. There is a seasoning period required before you can 1031, and you may not have owned this property for long enough? I can't imagine the capital gains will be a hefty bill on this though, so talk to a CPA on how to minimize them.

I've thought about Kentucky a bit for cash flow, maybe you can share some expertise about high rent:value markets? My ideal property is market value around 60-90k, market rents for 850-1150.