Relatively rookie investor here even though we've been renting out a home for about 10 years. Originally this was our family home that we bought from a builder around 2005 and then took out a HELOC to do landscaping, air conditioning, blinds, patio, and other stuff that a new builder home needs. We moved to another house along the way and rented this one out. The HELOC was rolled into a fixed rate secondary loan a few years back.
Now, we've moved across the country and want to use the equity in the home to buy additional investment property. Roughly doing the numbers we can refinance both loans, take some cash out, and still have better monthly cashflow than we do today. We'll easily cover a 1.25+ ratio and have about 40% equity still left in the house (60% LTV). In reality, selling the home, taking the equity and buying better investments might be the best route, but we have great tenants of about 6 years and I probably have too soft of a heart. Plus, I'd like to keep some property in the Reno, NV area as we will likely return to the area some day and I believe the property will continue to appreciate nicely.
That's probably too long of a backstory. The issue we're having is finding lenders to work with that will do a cash-out refi on the investment property. We've primarily been working with national banks since we live 2000 miles away. None I've talked to will do a refi that even includes the HELOC since that is considered "cash-out" on an investment property. What am I doing wrong to attract a lender? I've read enough in the forums to see the local bank suggestions but is that doable without a ton of traveling back to the area? What do other out-of-state investors typically do for lenders?
I wouldn't mind some advice from others on whether this is even a good move - adding debt to this property and extending the mortgage term in order to purchase additional property.
