I have a paid off rental property. How can I borrow money against it to invest in another rental property? Should I even consider doing that or just use my other savings for downpayment?

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Cash out refinance with pretty much any bank. You should be able to get about 75% of your equity out, as an investment property.

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@Manager 1 - What lender are you using? I am looking to get a new HELOC for a rental property too. Would be great to get a referral!

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You can take a cash out investment property mortgage loan against it, certainly. Now is a great time with the historic low interest rates, even for investment properties. At sub 3% rates I’d do that rather than use up cash (which you could apply to immediate expenses like reno/down payment on next property).

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#1 yes. You’ll need to disclose it on your new property loan, I believe that’s one of the questions they ask, is part of your down payment borrowed. Not sure how it affects underwriting/rates, but that’s something a lender will be happy to talk to you about.

#2 yes, can be same, but you can also use different lenders if you like. I’d recommend same to keep it easier. It’s still going to be two separate loans, but maybe they can assign the same team to handle so you’re not providing the same info over and over. You also don’t have to do it at the same time, you can get the cash out loan now while rates are low and have the cash in the bank while you’re searching for next property.

Not everyone does investment property lending so you may have to dig a little to find good options. I’ve been looking at Loan Monkey (broker, they place a lot with Quicken/Rocket) and AmeriSave but YMMV.

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The greatest part of doing a cash out Refi is it’s tax free. So you’re essentially able to pull out your “gain” and roll it right into another property without paying taxes. You can keep deferring the taxes until you finally sell the home... or die.

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I like using local “mom-n-pop” banks... regional banks too. Don’t overlook credit unions in your area as well. Individual lending officers differ, to be honest. Some go all out of their way to help you because they need to drive in customers and recommendations. Others are too busy and quality service is limited.

Just shop around locally, big and small. That’s the best advice anyone can give you.

Yes, yes you should.

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