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Updated over 5 years ago on . Most recent reply

Cash out refi on rental
I purchased a home in 2011 as primary residence 15yr 3.5%. I have since converted it to a rental. I was thinking about a cash out refinance in order to purchase more properties. The loan balance is $80k, current appraisal around $240k, $200 month cash flow, currently gaining about $800 month equity.
Would it make since refi and increase debt on this property even though it is gaining so much equity based off of loan amount?
Most Popular Reply

Now being an investment property and doing a cash out, the rate is going to be higher than your current rate.
With a $240k value, you can pull out up to $180k on the property with an LTV of 75%. This would allow you to pull out a little less than $100k minus closing costs and your current $80k Mortgage. If you can purchase a couple investment properties with this cash, and offset the difference in the mortgage payments - allowing yourself to come out ahead and overall increase your cash flow I think it would be worth it.
- Jerry Padilla
- [email protected]
- 585-204-6923
