All Forum Posts by: Matt Madalis

Cash-out refinance may be a good option assuming 1) Your properties still make you money once financed at the higher LTV and 2) Whatever you buy with the "cash-out" cash flows enough to make it worth your while (i.e. not relying on appreciation to make you money). Depending on your rates vs the market, there may be benefit to refinance even if you don't pull out cash.

It all depends on your goals and how you want to turn your appreciation into additional properties (or not). 

One thing you did not mention is whether or not this is a cash-flowing rental property or why are you selling it?  Is the house a bad investment, or are you selling to pay off other debt?

If you go to your credit union, they will likely require an appraisal for a re-finance.  Typically a refinance will be up to 80% of your home's value.  So assuming you appraise for $130K, you may be able to borrow up to $104K at an interest rate much better than 8.5%.  This sounds like you would have money to pay back your original lender plus some left over to pay off bad debt if that is your intent. 

One addtional thing to note:  Typically home equity loans are fixed rate. The rates on HELOCs are usually tied to the Prime Rate and will fluctuate based on market conditions.

I assume the 20K you requested was based on an estimated cost of repairs?  If you get 10K from the seller, and put in the additional 10K yourself do the numbers still work? 

Most of the big box stores offer new appliances that are discounted because of cosmetic damage or were floor models.  Another option to consider. 

My opinion is that with extra rebates typically offered there isn't that much increase in buying new appliances that it is worth the peace of mind.  You are depreciating the cost of the appliances too, so your taxable cost ends up less.

Others have offered good advice regarding dealing with the current tenants and PM.  In the future, you can add a clause to your lease that outlines "Tenant Responsibilities."  Detail what it is you expect your tenants to do (change lightbulbs, maintain the lawn, basic maintenance, etc.).

Perhaps a stupid question, but have you actually spoken with anyone at your current bank?  Or are you just going by what it says on the form?  Sometimes bringing the human element into the discussion and explaining the situation can help.

Good luck.

You didn't mention how you are financing the properties. Most banks will not loan to an LLC. If you do a personal loan and try to transfer to an LLC, you could be subject to the "Due on Sale" clause invoked by the lender.

You could add a M2M addendum to the current lease for the new tenants.  That way all would be on same lease/terms.  If you don't like the current M2M lease, make all tenants sign a new one (including original husband).  As others mentioned, make sure to screen the new tenants.

I use Cozy.co to collect rent.  Its free for both owner and tenant (small fee for paying with credit card but tenant pays that).  It also gives notifications once payments are initiated and deposited into your account.  Can also setup one-time payments for utilities, etc.

One downside is that it works via ACH meaning it takes about 5 business days to get in your account once payment is initiated.