Originally posted by @Erik Kubec:
Are you looking to refi and ADD CASH so that you are financing less, and thus would get a better cash flow? Usually folks that are refinancing investment properties are looking to make their cash flow worse so as to get capital out and go buy another property. It seems that sub 5% price appreciation (from 220k to 230k) does not justify the cost of the refi.
This was our personal residence at first. We couldn't sell it, so we decided to rent it out. 5 years later being rented out, we now owe $190k instead of $213k which is what the original loan was for. We aren't looking to pull any money out of the home for another deal as you would in the BRRRR method, we are simply trying to make a property that we still own a positive cash flow property instead of selling it all together. Some cash flow would be better than no cash flow eh? OR, we could just wait until the tenant we have left and sell the property and take the $20-30k in equity that we would receive and use it to find another property. And yes we would be adding $6k to the property when refinancing to get it to the 20% if the appraised value of the home is $230k. The tenant is most likely staying 2 more years but we are at a negative cash flow at the moment with the current mortgage payment. If we were to refinance, we would be in the positive, not by much but we would be and as rent goes up, it would get better. So the decision is to either just keep sucking it up until he decided to leave and sell the place. Or refinance and make it a positive cash flow at the 190k mark and keep the property for even when he decides to leave. Hope this clears up what our intentions are behind the question.
