Author Topic: Cash out refi. Now what?  (Read 223 times)

joenorm

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Cash out refi. Now what?
« on: March 04, 2021, 07:21:19 PM »
I have posted about this stuff before but still looking for feedback.

I am currently finishing up my mortgage free home and jumped on the opportunity to take a little cash out while rates are low. With some of this cash I will pay back a private loan for the empty lot next door to me.

My recently built house appraised for $635K so I easily pulled out $330K at 2.875%

I will use $130K to pay off the property loan so I'll be left with $200K cash, a new home, and an empty lot. My thought was to get another building onto the neighboring lot. Either build something or move a manufactured home here. I would use it as a rental and count on appreciation.

The rental numbers would be crap according to this site, but they'd at least pay the mortgage on the two properties and part of the taxes. I'd have to put at least the 200K into the building and it would probably fetch $1700 rent. I know it's not great but it's not nothing, right? But it does require a lot of effort getting a building onto the site, whatever way you crack it. I will add this is a desirable rural vacation area that has seen good appreciation over the years.

Other options would be dumping it all into Index funds and letting it stew for the next 30 years. Or sitting on it awhile to gather my thoughts about a creative way to use the money.

I actually just signed the papers, I could still cancel the deal. But it does seem like a good idea to seize the opportunity of cheap cash.

Looking for a little reassurance I haven't made a mistake. Part of my whole plan building this last place was to do it and live mortgage free. Now here I am with a mortgage again. Part of me feels excited for the next adventure with cash and the other part doesn't want to bother thinking about it. Any thoughts appreciated. Thanks for listening.


PMJL34

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Re: Cash out refi. Now what?
« Reply #1 on: March 05, 2021, 10:20:14 AM »
Joenorm,

Awesome appraisal and for completing a new build! How much did it cost you all in? I think the cash-out decision is fine.

About building a home next door to you...Well that's a personal preference. Do you want to build another house and deal with a tenant? Or do you want to relax for a while and let the money sit in vanguard and see where you are at in one year?

I have a feeling you just need a break, but will start building when you are recharged.

Best of luck!

joenorm

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Re: Cash out refi. Now what?
« Reply #2 on: March 05, 2021, 05:51:44 PM »
Joenorm,

Awesome appraisal and for completing a new build! How much did it cost you all in? I think the cash-out decision is fine.

About building a home next door to you...Well that's a personal preference. Do you want to build another house and deal with a tenant? Or do you want to relax for a while and let the money sit in vanguard and see where you are at in one year?

I have a feeling you just need a break, but will start building when you are recharged.

Best of luck!


Thanks for the reply. All in I built it for about $200K not including land. But that is not counting an hour of my labor, and they were many.

Putting in the market and waiting sounds great, honestly. But is that not a frowned on practice for money that may be used before, say, 10 years?