Should I cash out re finance

[Victor Tofilski]

I bought my first house (Duplex) last January. My rate is 6.625%. I was planning on combining the 3 strategies of brrrr, house hacking and sneaky rental strategy. I’m currently looking to buy my next primary residence to house hack. I was thinking of using the 9k that I can get out the refinance of the duplex for the down payment/renovations of my next house. Only problem is the new rate will be 8%. Does it make sense to take the higher rate to pull out 9k?

Should also mention I can’t wait till rates to come down to refinance because I will only be able to take out a loan for 70% of the value instead of the 75% while it’s my primary.

[Devin Peterson]

Quote from @Victor Tofilski:

I bought my first house (Duplex) last January. My rate is 6.625%. I was planning on combining the 3 strategies of brrrr, house hacking and sneaky rental strategy. I’m currently looking to buy my next primary residence to house hack. I was thinking of using the 9k that I can get out the refinance of the duplex for the down payment/renovations of my next house. Only problem is the new rate will be 8%. Does it make sense to take the higher rate to pull out 9k?

Should also mention I can’t wait till rates to come down to refinance because I will only be able to take out a loan for 70% of the value instead of the 75% while it’s my primary.

All of your equity will be eaten up by closing costs alone 

[Ko Kashiwagi]

Hi Victor,

How come you'd be only be able to take out 70% down the line? Are you saying you can't pull out 75% if it's not a primary?

If you can cover the higher mortgage payment and the leverage is worth the upside of getting another house, it seems reasonable!

[Ross Paller]

The move is always whatever SAFELY leads to owning more assets.

Safe means after you have conservatively underwritten the deal including maintenance, property management, vacancy, etc it still has positive cash flow. Even if only by $1.

[Sarita Scherpereel]

Hi @Victor Tofilski Have you found any projects that makes sense for your next purchase? Do you have something lined up you want to buy? Our market in Chicago has very low inventory, it's very competitive and the opportunities are harder to find. I personal would only explore re-financing with other lenders (having conversations- getting to know what they offer). Then, when I found something that made sense pull the trigger. If the cash I get out makes sense to put towards the next deal. 

[Michael Smythe]

@Victor Tofilski get a HELOC

[Erik Estrada]

Quote from @Victor Tofilski:

I bought my first house (Duplex) last January. My rate is 6.625%. I was planning on combining the 3 strategies of brrrr, house hacking and sneaky rental strategy. I’m currently looking to buy my next primary residence to house hack. I was thinking of using the 9k that I can get out the refinance of the duplex for the down payment/renovations of my next house. Only problem is the new rate will be 8%. Does it make sense to take the higher rate to pull out 9k?

Should also mention I can’t wait till rates to come down to refinance because I will only be able to take out a loan for 70% of the value instead of the 75% while it’s my primary.

Why not just take a HELOC? You should be able to tap into 85% CLTV if your DTI allows it