Cash Out Refi for a rental property

[jpanarra]

<div class="bbWrapper">Hey Everyone, JP here<br /> <br /> I have some equity in my home and I&#039;m exploring options for a Cash out Refi so I can put that money into a house that needs some work and I can convert it into an short term rental(think AIRBNB) or start leasing it out.<br /> <br /> I&#039;m looking across the board and I&#039;m seeing alot of older threads in here but nothing as of recently about starting out on the bottom as a real estate investor.<br /> <br /> Granted that i have a slight edge in my favor, my wife is a real estate agent and we have been talking about this for some time and plan on doing them.<br /> <br /> This is where the cash out refinance comes in. We know that we have at least 150k in home equity in our home right now, we could do a cash out refinance and if we do a 20% down we would be comfortable with taking out 40-50k and putting that down for the next property so we could lease it out/STR.<br /> <br /> Was wondering if anyone around her had that experience?<br /> <br /> The questions that I have in front of me right now is ,<br /> <br /> How I can come up with the proper calculations for a ROI because the internet is stuffed with different models and approaches for a ROI?<br /> <br /> What kind of loans should I look into?</div>

 

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[MetalGear]

<div class="bbWrapper"><a href="http://www.bankrate.com" target="_blank" class="link link--external" rel="noopener">www.bankrate.com</a><br /> <br /> Refi or HELOC works</div>

 

[jpanarra]

<div class="bbWrapper">Lol, thats a pretty generic comment.</div>

 

[MetalGear]

<div class="bbWrapper"><blockquote data-attributes="member: 20899" data-quote="jpanarra" data-source="post: 932716" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932716" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932716">jpanarra said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> Lol, thats a pretty generic comment. </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote><br /> I would put in an application because each bank will have their own model. Some banks also operate in certain areas and I&#039;m not sure where you are.<br /> <br /> I had a good experience with Better.com for my refi because they&#039;re like the Ally Bank of mortgages. No brick and mortar, and they pass the savings to the customer, lowest rates I have seen.<br /> <br /> As far as the ROI, I would look into JScotts spreadsheet: <a href="http://www.123flip.com/rental-analysis-spreadsheet/" target="_blank" class="link link--external" rel="noopener">Rental Analysis Spreadsheet</a></div>

 

[jpanarra]

<div class="bbWrapper"><blockquote data-attributes="member: 45443" data-quote="MetalGear" data-source="post: 932718" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932718" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932718">MetalGear said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> I would put in an application because each bank will have their own model. Some banks also operate in certain areas and I&#039;m not sure where you are.<br /> <br /> I had a good experience with Better.com for my refi because they&#039;re like the Ally Bank of mortgages. No brick and mortar, and they pass the savings to the customer, lowest rates I have seen.<br /> <br /> As far as the ROI, I would look into JScotts spreadsheet: <a href="http://www.123flip.com/rental-analysis-spreadsheet/" target="_blank" class="link link--external" rel="nofollow ugc noopener">Rental Analysis Spreadsheet</a> </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote>Sweet man, <br /> <br /> I&#039;ve already spoken with a few lenders but had none of them pull my credit yet because I&#039;m still inquiring and trying to learn the ropes before I take the hits of credit inquiries. <br /> <br /> Thanks for that spreadsheet i&#039;ll try and sort through it</div>

 

[ljean]

<div class="bbWrapper">The national banks typically have the best &amp; easiest HELOCs. Usually just an online application.</div>

 

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[MetalGear]

<div class="bbWrapper"><blockquote data-attributes="member: 20899" data-quote="jpanarra" data-source="post: 932722" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932722" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932722">jpanarra said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> Sweet man,<br /> <br /> I&#039;ve already spoken with a few lenders but had none of them pull my credit yet because I&#039;m still inquiring and trying to learn the ropes before I take the hits of credit inquiries.<br /> <br /> Thanks for that spreadsheet i&#039;ll try and sort through it </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote>Hey, sorry I was not able to give a better reply before. I was in an Uber on my phone.<br /> <br /> The reality is, it is great to use a model like JScott&#039;s but it is only as good as the numbers that you guesstimate and put in.<br /> <br /> I would imagine the biggest items will be taxes and maintenance.<br /> <br /> Possibility of occupancies being all over the place with AirBNB depending on your geographical location. Would look to see with AirBNB with a comparable rental to probe how busy it is, what pricing looks like, etc.</div>

 

[jpanarra]

<div class="bbWrapper"><blockquote data-attributes="member: 45443" data-quote="MetalGear" data-source="post: 932772" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932772" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932772">MetalGear said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> Hey, sorry I was not able to give a better reply before. I was in an Uber on my phone.<br /> <br /> The reality is, it is great to use a model like JScott&#039;s but it is only as good as the numbers that you guesstimate and put in.<br /> <br /> I would imagine the biggest items will be taxes and maintenance.<br /> <br /> Possibility of occupancies being all over the place with AirBNB depending on your geographical location. Would look to see with AirBNB with a comparable rental to probe how busy it is, what pricing looks like, etc. </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote>Haha no worries. <br /> <br /> Like i said for the numbers i have a pretty decent advantage in my wife being an realtor, She has complete access to the MLS System that gives an edge on the guesstimates you could make from lets say zillow or realtor. com. <br /> <br /> I am being mindful of the locations for the STR properties, I&#039;m currently looking into certain zip codes that have a busy nightlife near the city. <br /> <br /> For an example, I&#039;m in Indianapolis and the 2 spots that have a solid nightscene is Broad ripple and Fountain Square. <br /> <br /> I&#039;ve been playing around with the calculator you just shared, I like it alot and I can tweak it to the point where I can make goals of the interest rates and amount down.</div>

 

[Sethamus]

<div class="bbWrapper">There is AirDna and Mashvisor that you could get a subscription to for a month to compare your market and help analyze the best property size and area for short term rental. Use that along with long term rental comps and try to buy a property in an area where a short term rental would be valuable, but at the numbers where a long term tenant would be profitable (at whatever your LTR values need to be for you).</div>

 

[jpanarra]

<div class="bbWrapper"><blockquote data-attributes="member: 71999" data-quote="Sethamus" data-source="post: 932779" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932779" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932779">Sethamus said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> There is AirDna and Mashvisor that you could get a subscription to for a month to compare your market and help analyze the best property size and area for short term rental. Use that along with long term rental comps and try to buy a property in an area where a short term rental would be valuable, but at the numbers where a long term tenant would be profitable (at whatever your LTR values need to be for you). </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote>Seth, <br /> <br /> Thanks but I&#039;ve always felt strange about those kind of subscriptions, espeically when I have a realtor as a wife and she can see the history of rent in the area along with a lot of fancy realtor tools she uses for people in the area.</div>

 

[Sethamus]

<div class="bbWrapper"><blockquote data-attributes="member: 20899" data-quote="jpanarra" data-source="post: 932787" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch"> <div class="bbCodeBlock-title"> <a href="/community/goto/post?id=932787" class="bbCodeBlock-sourceJump" rel="nofollow" data-xf-click="attribution" data-content-selector="#post-932787">jpanarra said:</a> </div> <div class="bbCodeBlock-content"> <div class="bbCodeBlock-expandContent js-expandContent "> Seth,<br /> <br /> Thanks but I&#039;ve always felt strange about those kind of subscriptions, espeically when I have a realtor as a wife and she can see the history of rent in the area along with a lot of fancy realtor tools she uses for people in the area. </div> <div class="bbCodeBlock-expandLink js-expandLink"><a role="button" tabindex="0">Click to expand...</a></div> </div> </blockquote>She can see the history of rent, but does she have access to Airbnb and VRBO data? Those two companies scrub (dna and mash) scrub the short term sights for the data. <br /> House sale price, listed rental price (through realtor) are all mls, but does she have access to the short term rent data?</div>

 

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