Hey all,
If I refi my investment property these days I can only cash out 1/3 of my equity because of new guidelines (apparently.) It would improve my cash flow; however, is the only other option to sell a property to get more equity out? Is it easy to sell an investment property while under lease?
Property details - SFH / row home in a good part of Philadelphia.
It is fairly simple selling to landlords. They want properties that are occupied and getting market rents so if this is the case with yours, you should be ok.
What investors look for is cashflow. They are not going to pay more than the house is worth based on the cashflow. They are not going to pay for a house if the rent does not cover expenses and leave a nice cashflow.
I’m pretty sure that FHA has no such limitation. FHA has 2 cash-out programs: 85% LTV and 95% LTV.
My experience is this with conventional loans. If you have 4 financed properties or less and you are wanting to pull cash out of a rental then your limitations are to 75% LTV of a SFR or 70% of a 2 unit…no cash out on a 3-4 unit.
If you own 5 financed properties or more, then you are limited to purchases or rate and term refinances, no cash out except on your primary residence when you own 5 or more properties.
I hope this helps.