First REFI (7.625% rate)

[Dan Porter]

Good afternoon all,

Looking for some quick advice as this is my first REFI and I am having alot of doubts. I bought this property in college, renovated it while renting out the spare rooms and no use the property as a long term rental. I would like to pull the equity so I can continue building my portfolio. However I am having doubts- rates are so high right now I will be making under $100/month in cash flow. My cash out will be 66k, which is very exciting, but I will need a 16% return to justify the loss in cashflow. Below are some additional numbers:

Previous loan:

88k

2.75% int

$950/month cash flow

New loan:
168k

7.625% int

100/month cash flow

Please let me know what you think of this.. I can REFI when rates get low again- but there is no telling how long that will be and it costs 5-10k to refi.. Any advice is greatly appreciated!!

[Chris Barrett]

Don't Refi - at the very least get a 2nd mortgage and keep your cashflow closer to 350 a month to have a buffer for repairs and cap ex. Keep that 2.75 mortgage as long as you can.