Can I find 80% financing on property I already own and cash out some equity? I purchased the property about 5 years ago and lived in the property until about 6 months ago. Completed the rehab while living in the property. Bought another property and moved into it. Rehab was financed out of pocket. Loan balance from original purchase is $40K. Property would appraise between $70K - $75K. The property has never been rented. I have sufficient income/cash flow to make both mortgage payments. Credit score of low 800 when I purchased the new real estate 6 months ago. Want to start renting the property now. Local real estate agent says I can rent the property between $550 and $600. Monthly Ins & taxes are $150. With a new loan of $56K at 6.5% at 20yr amort would allow be to pull my equity out and be at break even cash flow. Any responces or advice would be appreciated.
Kristin, this is the type of “deal” I am looking at. I think that you can probably help this gentlemen get a lower interst rates. I preach the ARM to my clients because the cash flow becomes a major issue.
There is always a downside to the ARM but with proper planning and a savings strategy the ARM beats other financing hands down.
Do you agree. It is always about a 5 year plan that the investor has to implement with military like precision but at the end, he is one happy camper.
Carleton Sheets talks about farming your investments and the ARM is the best way to do that
The Pay Option ARM is a great program in many different situations. I also like it for investing to help maximize cash flow, etc. I know the Neg Am scares some people, but I think if you really look at the numbers, the neg am isn’t a big deal (assuming your main objective is wealth building).
Since this property is now NOO, it’ll be a little trickier, but there are a few lenders who do the Pay Option ARM on NOO.
Why would it be any trickier, there a lots of lenders who will do a Pay Option Arm on a NOO…
Trickier was the wrong word to use there - my intent was this:
NOO isn’t as nice as owner occupied. 
If you can break even with a 20 year loan, then that would be worth considering. Especially if monthly cash flow is not important to you right now. Do you plan to keep the property for more than 5-7 years?
The thing to keep in mind is that rents will gradually increase, and on a 20 year term, you will start knocking out principal soon. If this property is part of a retirement plan for you, then owning it outright eventually is a good plan.
Then again, there IS the Option ARM for monthly cash flow…
Thanks everyone for your help. I really appreciate it. Last Friday was my first time on this cite. Everyone seem helpfull and willing to share their knowledge and expertise. Thanks again.