All Forum Posts by: Ash Hegde

The rehab on your primary will help with the cash out refi, there will be a new appraisal which should reflect the higher market value. 

A HELOC can work for this, but keep in mind it has a variable rate, so it isn't the best product for keeping a balance long term.

If you have a lot of equity, sometimes a cash out refi will have a better rate than the blended rate of original mortgage plus HELOC. That may not be the case here since you've only owned your property for two years.

The target investment property looks like it will cash flow nicely! 

For house hacking, more important than the 1% rule is to see if it will cash flow when you move out. If it can support itself as a rental you should be in good shape. 

In addition, hopefully living there while renting out the other units makes your housing expense cheaper, allowing you to save more for the next investment. 

Welcome to the forums Allen! 

It's a numbers game, instead of 600 x 12 you'll be withdrawing 2,000 x 12. The website probably assumes some investment returns, so when you withdraw 600/month you may even out, but at 2k/month you will likely be depleting your IRA faster than it grows. After closing on the loan, you will not have to keep taking 2k/month out (unless you need it to make the payments).

Welcome to the board Nitzan! What are you looking at for your next project? 

@Dave Foster would be a great person to talk to/work with, he really knows his stuff on 1031 exchanges.  

From the opportunities that this will present, the refi is probably a good idea. The interest rate increase will hurt less since the loan balance won't be extremely high in this case. When you say break even, are you accounting for maintenance reserves and vacancy? If so, it seems like a good move. 

From what you laid out, a bank statement loan might be your best bet. The rates will be higher than FHA or conventional financing. Being able to put 20% or more down will help as you won't need mortgage insurance on top of this.

Your income from a flip should not cause your long term rentals to be taxed as ordinary. That being said, for recordkeeping, it is probably better to have a different LLC for buy and hold vs flip properties - though you do not technically need to separate them or have LLCs at all.