All Forum Posts by: Jonathan Barrett

@John Warren

Thanks John. Makes sense. For me that's exactly how I plan on doing it as both properties have no loans and the income is passive income currently. Labour I did not do it sooner (one of the properties I have owned for about 8 years), I think now is a good time given the rent has increased substantially and so has equity. And yes, good to have the cash if I need to make an offer! Thanks for the advice!

Hi all,

I've done some searching on the forums as well in relation to my question. I'm just looking for some more information about the method in general as my strategy has been to buy low and hold and I've used cash to purchase properties. That has obviously some benefits but the drawbacks is using most of your reserves and it is then held up in an asset. I've previously investigated drawing equity to purchase another but never had any luck or progressed it given the properties are in Florida but it is something that would have certainly helped me build my portfolio given the amount of equity I have in the properties and that they are owned outright. Now with the market as hot as it is the money will not go as far but I'm still keen on moving forward and shifting my strategy to more of a BRRR method to build passive income but also my portfolio. I guess I'm just a bit nervous given what is involved, and seeking clarification more than answers.

For example, if you draw 250K from a property with a cash out refinance and don't have a property yet, how much do you usually keep in reserves so that you can pay for the loan until you find a property, hopefully with tenants already that are paying the payment for you and a little bit extra. This has been an obstacle for me as I'm not sure how long it would take to find a property, but I also want to kick off the cash out refi process, particularly with values being so high and interest rates so low. 

Also - once you've found a property, how long do you have to wait to do a refinance again? I've seen it's about 6 months typically. How much is your income taken into account when doing a cash out refinance? Is it the same process, similar to a normal loan? Or because you have the equity in the home, it's easier to draw?

Thanks,
Jonathan

Hi,

I'm hoping someone can point me in the right direction if they have had a good experience with a financial institution that does cash out refi's on investment property in Florida. 

I have 2 properties in Florida that are owned outright (purchased with cash) and are now valued at about 550K (both combined). I'd like to draw out equity to purchase another as I'm now starting to follow the B,R,R,R method (to some extend - as I learn more). I live and work overseas in Australia. I've been here since 2012 (off and on) as a contractor but earning better money than I could have in Florida, so I've stayed. I've filed taxes every year (for both Aus and the USA) and my income can be verified. Credit score is around 770's. I've looked up a few banks but most do not offer cash out's and the only one I could find is Pen Fed Credit Union who have been hard to contact. 

Thanks in advance!

Jonathan

This thread has such great information and thanks to OP for posting that question and scenario.