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It's pretty crazy what current low int. rates and increasing home values just did for a property we own.
We just cashed out our entire initial investment without making any improvements to the property, and our monthly payment will only go up ever so slightly.
The details:
We just cashed out our entire initial investment without making any improvements to the property, and our monthly payment will only go up ever so slightly.
The details:
This is the second rental I bought, purchased in 2017.
Purchase price: $115k
Down payment + closing costs: ~$25k
Interest rate at purchase: 4.625%
Market: Indianapolis
Purchase price: $115k
Down payment + closing costs: ~$25k
Interest rate at purchase: 4.625%
Market: Indianapolis
A couple of months ago, I noticed that homes in the area were selling between $140k-160k.
I figured this property *should* appraise around $140k-$150k, given comps.
So I reached out to a lender to get a prelim quote on a cash out refi and they quoted me at 3.125%.
I figured this property *should* appraise around $140k-$150k, given comps.
So I reached out to a lender to get a prelim quote on a cash out refi and they quoted me at 3.125%.
If the property appraised for $140k-$150k, I'd be able to pull out ~80% of my original $25k that I invested.
And the best part was that my monthly mortgage payment would only go up a couple $$ given the rate drop from 4.625% to 3.125%.
So I decided to move forward.
And the best part was that my monthly mortgage payment would only go up a couple $$ given the rate drop from 4.625% to 3.125%.
So I decided to move forward.
The appraisal ended up coming back at $157k. Was so pumped, given appraisals can so often go below expectations.
But the market is
right now so we lucked out.
But the market is
right now so we lucked out.
We just closed this refi and ended up pulling out $26k ($1k more than our initial investment), given the higher than expected appraisal.
All tax-free.
And my mortgage payment will only be going up $29/month, so cash flow is still good here.
All tax-free.
And my mortgage payment will only be going up $29/month, so cash flow is still good here.
I don't know the moral of the story here... just feels like we got lucky during a weird time & I'll happily take it.
Maybe it's that being in the game helps increase your odds of getting lucky?
(Then again, it also increases your odds of losing your ass so
)
Maybe it's that being in the game helps increase your odds of getting lucky?
(Then again, it also increases your odds of losing your ass so
)
Also: $26k is tiny compared to what a lot of the pros are doing.
Think about the people doing this with multi-million dollar properties.
Think about the people doing this with multi-million dollar properties.
