All Forum Posts by: Paul Nicklin

New Goals, Rental refinance - cash out / lower IO payment or Repayment?

Hi BiggerPocket investors! I wanted to get some advice / options. I am looking to refinance a SFH I have rented out in UK and use the money to invest in a multi unit in the US. I bought the SFH in 2003 and lived in it for a time. I moved abroad in 2012 and was overpaying the mortgage to clear. Current situation:

Value: $500K

Mortgage: $56K

Rent: $1685

Mortgage: $1450

Term left: Just under 4 years

My goals have changed, I am looking to build my real estate portfolio in the US. Long term to replace my job and provide in my retirement. I am 38 so have some time to do this. I currently have a two family in Washington DC and am looking at four unit buildings. 

Buying more property in the UK is unrealistic, with property sales tax and tax circa 20%.

I have a few quotes to refinance to $200K (Although most will let me go to $350K) and take about $140-150K out from the property. I would still have 60% equity in the property. Refinancing options (not the best as I am not a resident):

All 25 year options

Lender 1 - $1350 refinance costs.

1 Fixed 5yr, 4.49%, $1129 repayment.
2 Fixed 5yr, 4.49%, $760 interest only.

Lender 2 - (I haven't had hard figures across) Between $3000-4000 refinance costs.

1 Fixed 5yr, 3.97%, $857 repayment.

2 Fixed 5yr, 3.97%, $580 repayment. 

Some back ground, I am married.  We are both employed and have good money reserves. We also have no housing costs for the next 5 years. 

At the moment I am leaning towards Lender 1, I don't like the heavy costs for Lender 2, plus with it being a 5 year fixed (not many longer options in the UK), I will have to refinance in 5 years. 

Is refinancing a good idea? Am I being too conservative (my natural state) with the refinance amount? What refinance option makes the most sense?  Should I be leaning towards interest or repayment. 

I have known the property in the UK wasn't being utilized for some time, but couldn't find a solution, till I got on BiggerPockets. Its been a real mindset shift. Would love to hear what you all have to say about this!

@Michael Garofalo 

Appreciate the advice, I had read a bit about the foreign entity, but I was getting bogged down. Thanks for the offer to PM, will be in touch!

@Anne Russell

Spooky! Congratulations on the new purchase. Thank you for the advice re the license and your LLC.

Just waiting on two final quotes to come back on the insurance. Will send you the details once I get them, if that is of interest?

Hi BP Community, First post - feels like I have been listening to the podcast and reading the forum for an eternity!

I am hoping someone could give me some guidance on forming a LLC. I am about to close on a multifamily in Washington DC (Yay!). Its for investment purposes, I am going to be renovating, holding and renting. I have homeowners & an umbrella policy lined up. I currently live in Northern Virginia and will be out of the country by the end of the year (US State department, so paying VA State taxes whilst out of the country).

Advice on whether to setup the LLC in DC, VA or Delaware? If formed in VA but the property is in in DC will this mean more paper work / expense?

Sorry for the newbie question and thanks in advance for any info.

Paul