All Forum Posts by: Thomas Klein

Hello,

My question is do I max out my cash out refi? 

I am refinancing my mortgage free single family rental property. 

I am able to take out 70% LTV which is around $262,000 on a value of $350,000.

It’s currently rented at $2250/month. 

If I max out the refi my new payment would be around $1878 a month, if I am able to get a 3.5% rate. 

That would leave me with $372 a month cash flow. Not including any deductions for vacancy, cap ex, maint, or management.  (I currently self manage). 

I would take that cash and pay off the HELOC used to purchase the house ($215,000) and use the other ($47,000) to add to my original $249,000 HELOC and have a total of $296,000 to go find another property.

Or is that cutting it to close...?

Thank you kindly!

@Natalie Schanne

Been there. Lol.

I try to ask if I can have a soft review of my two years previous taxes and documents before even applying or having credit pulled. 

Thank you. 

@Devon Coleman

You hit that nail on the head the first time. 

I just spoke with someone at the credit union about what you just stated. 

Thank you!

@Raymond J. Rodrigues

Yes, I was hoping to be able to go conventional.

I need a local lender that understands real estate investment lending.

@Jason L.

That’s exactly what happened.

They gave me two HELOCs on two rental properties, (which I a am so grateful for) but would not do the refi.

They offered to increase my HELOCs and add a third HELOC to my most recent purchase vs a refi.

I do love that they will do the HELOCs on investment. I have considered doing the HELOC on the paid off property vs the refi and take that money and go look for something that will be able to refi out commerical and pay all three HELOCs off or just keep the interest only and no refi and collect some extra cash for the time being.

I guess these are good problems to have. Haha. 

Thanks so much for your comment. 

@Matt Devincenzo

Thanks for that!!

@Chase Thompson

I am ready to start buying in Tennessee like yesterday!!!! Been looking in Clarksville. 

I am not sure about the property tax (non homestead) in other states. I don’t even know if that’s just Broward County alone that has the max of up to 10%. Each county may be different. 

Hey all,

Hope everyone is doing well. I wanted some feedback on a great problem to have. (I think...)

I thought I had good rentals. Haha 

The credit union I use (Space Coast Credit Union) told me my DTI was too high in addition I showed losses on my previous 2 years of taxes on my rental properties.

So I paid off a rental property that only had a balance of $40,000 ($1333 PITI a month)( Rent $2000)(Value $340,000).

I went back to the credit union after paying the $40,000 balance off and they said no, again. 

They said I I needed to wait until I didn’t show so much losses on my tax returns from my four rental houses. (In those two years of returns, I had bought and rehabbed two properties so I did have valid deductions to write off).

I wanted to refinance my recent purchase to pay back the HELOCs I used to purchase and rehab the property. 

The two HELOCs total $238,000 interest only adjustable rate. (Currently 4%) ($790 a month)

After getting told I didn't qualify due to my DTI and tax returns from the credit union, I went to a Mortgage Broker.

The broker stated they didn’t see a problem with getting me qualified with conventional financing.  

I don't understand how two loan originators can have two different conclusions. 

Anything anyone could suggest would be amazing.  

 I just dont want my credit to keep getting pulled for these lenders to keep telling me no.

I have called dozens of credit unions around here and they will not review anything, until I have applied and had my credit pulled.

I really am considering just letting Visio (private money lender) have the refinance because it's not going to be reported on my personal credit. (Then I won't have any more DTI future problems)

I would be paying 5.625% with Visio vs 4% conventional on $262,000. 

It would not cash flow that great by using the 5.6255% loan ($100), but I would be able to use that $262,000 to pay back my $238,000 HELOC and move on from there.

I do not understand how real estate investors keep repeating the BRRRR.

Between all four houses last year the taxes and insurance payments were $32,000. (My rents did cover all that)

I have really considered just selling and getting out of the Fort Lauderdale market and moving to long distance investing. I realize that rents will increase, but non homestead properties in Fort Lauderdale taxes increase every year up to I think 10%. Property insurance here as well is only increasing, too. 
I would love your feed back and long forward to talking more. Thank you everyone for taking their time to read this!!