Cash out refi of HELOC/Home Loan

[elnuk]

Hello All,

I need to take some equity out of a property and i was wondering what was the best way to do it.
Should i do a cash out refi and limit credit exposure or take out a heloc which would show up on credit as another loan? What are the effects of both options in terms of rates, etc...

I would greatly appreciate any feedback from the wonderful RE minds on this forum. :praise:

Thanks.

[Dan Auito]

Hello All,

I need to take some equity out of a property and i was wondering what was the best way to do it.
Should i do a cash out refi and limit credit exposure or take out a heloc which would show up on credit as another loan? What are the effects of both options in terms of rates, etc...

I would greatly appreciate any feedback from the wonderful RE minds on this forum. :praise:

Thanks.

Hello Elnuk, I'm a Heloc kind of guy but if you didn't actually use the money then the line wouldn't actually take any equity from your current property, if you did actually use the line then in todays environment the interest rates charged are very reasonable and I would be more worried about the return on what I was using the money for!

I would only consider a cashout refi if it was no fee and would be getting a lower interest rate to boot in addition to having an immediate place to put the liquid cash where it would make a solid return, no 3% interest sitting in some bank acct for me! I don't even like money market accts as active real estate investments usually do about 25% annual, if invested for the long term in your own ventures.

That's my two cents!

[elnuk]

As always Dan,

Your insights are very immpressive and i am glad i posted the question. I also agree with you that the money should be effectively utilised and i do plan to put it back into RE with projected good returns. Can't wait till i am making 25% on RE too.

Thanks.

[Dan Auito]

As always Dan,

Your insights are very immpressive and i am glad i posted the question. I also agree with you that the money should be effectively utilised and i do plan to put it back into RE with projected good returns. Can't wait till i am making 25% on RE too.

Thanks.

It shouldn't be long now!

[elnuk]

In thinking about this some more, am i better off using the funds to bring existing investments up to positive cash flow (they are flat right now) or should i consider using the funds to get into more porperties?

Thanks.

[Dan Auito]

In thinking about this some more, am i better off using the funds to bring existing investments up to positive cash flow (they are flat right now) or should i consider using the funds to get into more porperties?

Thanks.
Elnuk, if you can be assured of getting a positive cashflow by putting moderate funds into the existing investments then that is what you should do.

Don't buy more until you have a solid base of investments working positively to help you grow, if you invest in more flat or non-producing assets you could find yourself on something to the effect of the Titanic and we all know how that one ends! :thumbdown