Cash-out Refinancing options

[EJ Ehrlich]

Hey guys, I bought a property or cash a couple months ago. The property is netting me about 14%. I want to pull my money out to purchase a second property. However, rates are high and plus My credit score is low, The bank is giving me a high interest rate. If I Refinance with the bank my NOI Drops down to barely breaking even due to high mortgage payments with high interest. I can either refinance and bite the bullet with high mortgage payments and low NOI OR wait until rates go down and And then refinance and buy another property.

What do you guys think?

[Melissa Kirchhoff]

@EJ Ehrlich - Well, first, how much will this next property bring in? Will that make it worth the other one dropping? I would weigh that out first. Second, I don't think rates will be dropping, personally. It's good that the fed agreed to only do 2 raises/year but I think rates will continue climbing. However, you could work with a lender to see if you can get your score improved enough to get a better rate. Are you maybe right in between and doing a couple strategic moves that can make it go up quickly?

Those are probably the two things I'd consider in making that decision. If the second purchase can be very worthwhile, it might be worth those consequences, if not, I'd work on improving credit score to get a better rate (but keep in mind, in the time that you improve, it might naturally go up anyway and be a wash!)