Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Personal Finance
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 4 years ago on . Most recent reply

User Stats

9
Posts
2
Votes
Robert Walmsley
  • Real Estate Broker
  • Roseville, CA
2
Votes |
9
Posts

Cash out or pay off? Need advice

Robert Walmsley
  • Real Estate Broker
  • Roseville, CA
Posted

Here is my scenario, Sacramento California.

Rental property that I owe $145K (appraised at $430K) at 3.6% 30 year, 7 years into the loan, total PITI payment $1080, currently rented to great tenants at $2200 per month.

Have a few days to decide the term of my refi, here are the choices:

15 year rate/term at 2.25% increases PITI payment to $1290, still cash flows great and I pay it off quickly.

30 year cash out ($100k, staying under 60% LTV for rate) at 2.25% brings PITI up to $1380, still cash flows well and frees up $100K for another property. But I restart the amortization and won't pay the house off for a long time.

Not a great time to invest in another deal here in CA but will I kick myself later for not pulling the funds for the right opportunity? $100K at 2.25% is cheap money, plan on just holding it until the right deal comes up. Part of my wants to pay off the rental quickly to increase cash flow to $2200 per month minus tax and expenses.

Need some advice. I’m an experienced broker/general contractor so I know the ropes on finding another future deal and controlling costs but when will that deal come is the question. Thanks for your help!

Most Popular Reply

User Stats

893
Posts
1,135
Votes
Jon Crosby
  • Investor
  • Roseville, CA
1,135
Votes |
893
Posts
Jon Crosby
  • Investor
  • Roseville, CA
Replied

@Robert Walmsley. Try US Bank, they have some of the better rates, but yes you are correct it might be tough for investment property, but also surprised you are getting those rates for an investment property so who knows.  I had some luck with US Bank in the past though.  

Loading replies...