Refin or hold?

General Real Estate Investing
1

Hi everyone,

Thank you in advance for answering my question! I am very conflicted about my situation right now, and would like to hear some more seasoned opinions as I am still very new in the game.

I recently bought a rental home in the DFW area, paid in full because it was a wholesale, and just finished the rehab work on it and it’s ready to be put on market. Immediately I started the application for refin since that was a significant amount of money I had put down. Now that the loan papers are ready, just waiting for my signature, I am having second thoughts. The DFW market right now is really just ballooning and the prices are pretty ridiculous. Since the home hasn’t rented yet (no rental income) and I am pretty sure I won’t be able to find a good deal in the next few months, should I still refin the home and start paying mortgage interest or should I just hold and wait til I at least have a tenant in place?

Any thoughts would be greatly appreciated, thanks again for the help!

2

Hello,

I think you should refi now. You don’t want to miss on a deal later because your money is not available( I made that mistake last year). Your first mortgage payment will be next month probably, and the house will rent out in the next two months anyway. Next time market the property at least a month before you plan being done remodeling. Hope this helps.Good luck!

3

Hi,

The third choice is to sell that property today and re-utilize your capital and profits into new opportunities.

Diversification is key and knowing when to hold them and when to sell them is an important distinction.

Good luck,

            GR
4

There is a reason for the adage, ‘Cash is King.’ A small mortgage payment is much more preferable while having cash for another deal than having 100% equity…if you are building for your future.

Get a buyer contract to offset the new mortgage liability, take your cash and build an addition to your portfolio. Renting might be more problematic, but selling with private financing will yield you higher cash flows and you will not have to ‘fix toilets’ as a landlord.

Hope this helps.

Rob