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Anyone have a good veggie chilli recipe?
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Wow, you only make 20k of the 90k equity? What are these taxes and fees you're talking about ? Seems pretty high. Which area/city is the property?
If you can still generate decent cash flow on the property and get enough cash out for your next investment then go with the refi
A cash out refi would give you maybe $20k-$30k in this scenario (assuming you put 20% down, you didn’t provide your LTV), your interest rate may drop but you will be starting over in the amortization schedule, plus likely paying points / fees.
The better option here or am I missing something?
Cash out refi and continue to rent it gradual rent increases. Use that cash to buy more property!
C1, depreciation recapture tax (25% of depreciated value), realtor fees, $18K, closing costs, staging, etc gets me down to there ($~70K);
P1, when you say $20-30K, you mean on top of the equity I’ve already built, correct ? If so - understood. Just thinking that in either case I get the same $$ but in one I retain a property with (albeit less) positive cash flow and get instant cash vs having to time the sale with my next purchase.
Interest rate I had was 3.875%
Most cash out refi are based on total LTV, so you’re not going to be able to pull all your equity out, only the difference between your current LTV and your LTV at 80%
What P1 said, but also note that the interest rates on investment property mortgages are typically 0.5-1% higher than owner occupied, and some lenders may only let you draw 75% LTV on them
Look into doing 1031 exchange to avoid capital gains and depreciation recapture. Not going to avoid the transaction costs though.
I did... challenge is it’s very constraining. 45 days to find the property you want to buy, higher % down payment, can’t live in it, etc