Trying to get started; need to borrow a creative brain to see what I'm not seeing.!

[Bre Hargis]

Hi I'm Breanna (AKA Anna-lysis paralysis) I have a primary residence in North *Texas* that we owe $211K on. It is financed at 3.25% and we did a cash-out Refi 3 years ago to pay off vehicles with higher interest rates. The house is a 3 bed, 2 bath and in an excellent area for families; current rentals in the area matching mine are going for $2000-2500/month in rent. The goal is to rent this property but utilize funds like a HELOC to put down on another primary residence and fix it up then in a year make that into a rental as well and continue with this strategy. The current value of our home now is $325-340K BUT bc we did a cash out we would have to refi again at a higher rate to access the equity (state of TX rule bc of the cash out) and that would give us zero cash flow on the new mortgage payment which we were hoping to use on paying down the HELOC that gets us into the next rental. I feel stuck! Can anyone see something I don't?!

[Denver McClure]

Hi @Bre Hargis, fellow North Texan here! Similar to a 401K loan, you can also look into a Margin Loan if you or your partner have an individual or joint taxable account. You can borrow up to 50% of the portfolio value, with rates between 5.67% and 6.33%. There's no income/credit checks with Margin Loans and it would act as an interest only LOC. You might also be able to borrow from a life policy of you have a cash balance as well.

I don't think it's the end of the world if you do another cash-out refi to fund the cost of a down payment on cash flowing rental. Just anticipate that you may refinance again in a few years once rates stabilize somewhere below 4% when you run your numbers. I'd recommend reaching out to @Tyler Hodgson at NXT Mortgage. He's based in Coppell and has plenty of experience working with investors like yourself.