One of the things we see in the Dallas Fort Worth market right now is that pricing on homes has gone up significantly. Values are much higher than they were five years ago. A lot of our clients have a rental property, which they’ve owned for a few years, and the worth has gone up. So, they want to take advantage of purchasing more property, but they don’t want to give up what they’ve already got. What are the options? We’re posing that question to Cary Donham with Capital Concepts. He has some real estate investing tips.
How to Refinance a House You’re Renting Out
The best option is a cash out refinance. If the value is high enough in comparison to what you owe on the property, you can tap into that equity and we can do a cash out. I’m doing quite a bit of that right now. Earlier this year, Fannie Mae changed their guidelines in favor of investors. Before, you could only do cash outs on one to four properties, and now it’s all the way up to 10. A lot of investors are choosing to cash out multiple properties at one time. Even if you own more than 10 properties, we can still do portfolio cash outs.
Don’t Sell - Refinance
You don’t have to sell a house to get that money and buy more properties. You can control more by doing a cash out refinance. The only reason to sell is if your property is in a neighborhood that you don’t like, or you can’t seem to get good quality tenants. If it’s a nice property in a great neighborhood, don’t give it up to buy another property when you have this option instead.
Competitive Buying Power
We can analyze whether the value is there for a refinance to make sense. Also, if you own the property free and clear, we can do a line of credit on that home. Your credit will then sit in a bank and you’ll be ready to move on a property that you want to buy. You can make a cash purchase, and come back for the refinance later. With a traditional mortgage, it might take you 30 days, but in this case, you’ll have the money available in just a few days. It’s as simple as transferring your funds. You could go and close on a property in a handful of days. That allows you to buy a property faster than someone who is submitting a financed offer. That puts you at a competitive advantage over anyone else bidding on the house. Cash offers will always help you.
Contact us at McCaw Property Management with any questions about cash out refinance for a rental property, and we’ll put you in touch with Capital Concepts. We’d be happy to help you with any other questions you have pertaining to property management in Fort Worth.