Originally posted by @Melinda Pajak:
Thank you, Dan, for your response. I was hoping you would chime in as I've seen your responses elsewhere and you are from Poway. The only problem with taking money out of the rental property is that it is a 5-unit so that means it's a commercial loan. You just can't get great rates on those especially when the amount is so small. Most banks don't want to deal with that.
An aside...It's nice to know that the ROI in San Diego is so high. We also took advantage of another tax break when we got the property historically designated (it was built in 1891) just after we bought it.
Do you know any banks willing to lend on a 5 unit property that won't just give us a balloon mortgage (30 due in 10) interest only thing?
Thanks.
Great problem. What rates are you being quoted? You stated that "most banks don't want to deal with that". How many banks have you approached? You are in a prime position to receive the most favorable rates on a commercial property especially given the length of time you have owned and managed the property. You strongly may want to consider leveraging the property, as mentioned by other commentators . You have significant repair costs that may have to finance to get done. Also, there will be some tax savings by utilizing a loan that you might be overlooking. You should speak with your tax professional.
