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Updated about 7 years ago,
Pulling out equity for repairs
Hello Guys,
I am in need of some guidance. My wife and I have a rental property in Arlington, Tx with a remaining mortgage of $52K. It has been rented below market at $1050/mth on a month to month lease. 3br/2.25ba in that area rents for $1200 to 1450 a month.
After a recent storm there was a lot of interior damage because of bad roof. The kitchen cabinetry is trashed. Carpet needs to be taken out. Lastly foundation needs to be fixed which is quoted at $7K. The property after repairs will apprise for $138K easily. The closing fees for the loan is around $7K. Can I get better?
My plan is to evict the tenets and take out $30K of equity to make repairs to the home. Our mortgage now is $850/mth including taxes and escrow with less than 15yrs remaining. The new loan will be $897 30yr at 4.5ish% including taxes and escrow. After repairs are done rent out property at $1200 to 1250 to have very competitive rent and tent retention. 10% of cash flow will go against mortgage to pay off loan faster and 5% toward repairs so that we will not have this issue again.
Thoughts?