All Forum Posts by: Scott Luetgenau

Hello BG Community!

I'm interested in a cash out mortgage refinance. Here's the current situation. We currently have a 15-year mortgage from Wells Fargo on this 3-bedroom, 2-bathroom SFR in downtown Raleigh. We owe about $100K on the mortgage and have around $70K from a HELOC and home equity loan we used to renovate the property. We think it's worth approximately $300K. We'd like to refinance to a 30-year (to aid cash flow), pay off the HELOC and HE loan ($70K), and pull cash out of the deal for a down payment on another investment property. We have tenants in the space who pay $2K monthly for rent. Our current cash flow is -$200 a month and we'd like to fix that.

The initial numbers came back from Wells Fargo at a 5.25% interest rate. Based on a $300K appraisal, the LTV would be $225K which would allow us to pull out $55K after paying off the $100K owed on the house and the HELOC/HE loan ($70K). The monthly payment would have been $1,435.

She then emailed back to say she had made a mistake and based the interest rate on owner-occupied housing. Her new numbers were based on a 6.125% interest rate which would increase the monthly payment to $1,689.

This small change in interest made me take pause and realize I should reach out to the collective knowledge on this forum. Is there a better way? Is 6.125% a standard rate for an investment refi? If not, what should I be looking for? Finally, does anyone suggest any other lenders in our area for this type of deal? Many thanks for your patience and guidance!

@Andrew Postell This is all super helpful information. I love your questions for lenders and this will put me on the right track. You mentioned the 6%-ish rate being normal for 2-4 unit cash out refis - this is actually a SFR. Heading over to the NC forum now to inquire about lenders. Many thanks!

@Jj Horst The current loan is a Wells Fargo 15-year at 3.5% ($100K), the HELOC is 10.8% ($11,265) and the home equity loan is 5.5% ($58,802). Our monthly payment for all three is $2,200. A 30-year refi would allow us to pay off the HELOC and HE loan, pull out around $55K for more RE investing, and have the property cash flow by a few hundred bucks.

Hello BG Community!

I'm interested in a cash out mortgage refinance. Here's the current situation. We currently have a 15-year mortgage from Wells Fargo on this 3-bedroom, 2-bathroom SFR in downtown Raleigh. We owe about $100K on the mortgage and have around $70K from a HELOC and home equity loan we used to renovate the property. We think it's worth approximately $300K. We'd like to refinance to a 30-year (to aid cash flow), pay off the HELOC and HE loan ($70K), and pull cash out of the deal for a down payment on another investment property. We have tenants in the space who pay $2K monthly for rent. Our current cash flow is -$200 a month and we'd like to fix that.

The initial numbers came back from Wells Fargo at a 5.25% interest rate. Based on a $300K appraisal, the LTV would be $225K which would allow us to pull out $55K after paying off the $100K owed on the house and the HELOC/HE loan ($70K). The monthly payment would have been $1,435.

She then emailed back to say she had made a mistake and based the interest rate on owner-occupied housing.  Her new numbers were based on a 6.125% interest rate which would increase the monthly payment to $1,689.  

This small change in interest made me take pause and realize I should reach out to the collective knowledge on this forum.  Is there a better way?  Is 6.125% a standard rate for an investment refi?  If not, what should I be looking for?  Finally, does anyone suggest any other lenders for this type of deal?  Many thanks for your patience and guidance!

Super helpful, @Will Kaufmann!  Reaching out to @Brandon Hall now.  I really appreciate the referral!

I'm wondering if anyone could suggest a good accountant in the Raleigh area who is familiar with the intricacies of real estate? 

@Karen Rittenhouse That's super helpful, Karen.  I may reach out to you if we run into any barriers.  Many thanks!

@Eric Weireter  That's terrific feedback, Eric.  Much appreciated!!

I have a newbie question.  I currently have three rental properties where I live (Raleigh, NC).  I'm looking at other communities around an hour outside of Raleigh for rental property investment opportunities.  The market in Raleigh is insane and I'm just totally priced out.  

The question is: should I look for a lender in the long(-ish) distance community I target or should I continue to work with my current lender in Raleigh?  It'd be a primary residence for 6 month - 1 year before renting it out and moving into another property.  Many thanks for any feedback!