Cash out refinance investment property

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Submitted by TeCKis300 on January 18, 2018 - 2:13pm

I have a condo that I currently own free and clear.

Is there any banks offering cash out refinance options that might let me leverage the equity. Possibly in order to pickup another property? Or perhaps a HELOC?

Guess another question is whether it's a bad time to buy investment real estate in general given the current prices? Cash flow certainly would be much harder to come by. But projected home prices are still going upward?

Submitted by livinincali on January 19, 2018 - 1:09pm.

Just as an FYI HELOCs interest charges are no longer tax deductible under the new tax laws for most uses of a HELOC. Apparently you can still deduct interest for improvements to the home or condo the HELOC is attached to. You'd probably need a tax lawyer and/or accountant to see if there's a loophole for deducting it as a business expense for a rental.


Submitted by spdrun on January 19, 2018 - 2:20pm.

Yep, it would be a business expense IF you use the proceeds to further your rental-property business.

Submitted by TeCKis300 on January 19, 2018 - 2:32pm.

So am I understanding correctly that if I used a HELOC from the existing rental property, as down payment to buy another rental property, that I can deduct the interest as it's a business expense?

So which banks out there are offering HELOCs on rentals?

Submitted by spdrun on January 19, 2018 - 3:26pm.
Submitted by Escoguy on January 25, 2018 - 10:09pm.

I'm getting a new Heloc on an investment property from BoA.

No specific plan for use, more to have in case of an opportunity.

-30 yr fully amortizing payment calculated monthly
-initial rate 3.24% 12 months, then 4.24% variable
-no fees

Notable that the bank won't use the income from the property in question to determine income, but fortunately I don't need that income to qualify.

Mostly to use as backup if I need cash for next 10 years before I can tap IRAs without penalty.

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