Happy New Year everyone, I am a little stuck and hope you can help.
I have a rental property with 75k equity in it. I need money to get another investment property, and that amount (needed) it about 65k.
Is it better to Refi the rental property? or Sell it? What are some of the Refi options you have seen for over 80% of the property value?
Your shared wisdom would be appreciated. :smile
It will depend on what your exit strategy is. If you have a goal of accumulation of rental property you may want to refinance so that it stays in your portfolio. You also need to make sure your cash flow can stand the refi. You can sell it and 1031 it into more property but you don’t get any cash if you do that. Or sell and pay the capital gain (if it is more than 12 months) and get the cash to spend on whatever you want.
I am a fan of refi to get cash out whenever possible. But it is all about the numbers. Can the property handle the refi or what did you have in mind when you bought it.
You are going to find it difficult to find a cash-out refinance of $65k when there is only 75k equity.
Apparently, lenders are getting a bit more touchy about cash-out loans of any sort, and they are also watching the loan to value ratio more carefully.
I always start with my local bank first. If the loan is not main stream, and they won’t do it, then I have a really good mortgage broker who can often find a place for a more difficult loan.
The best place to start is a local bank who carries their mortgages in-house.
If you have excellent credit, you might be able to find a private investor who would like to have a note secured by good real estate.
you can go to 90% LTV (sub-100k deals) with an equity line from BofA or Wells fairly easily IF you have strong credit and assets.