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Old 08-10-2011, 01:32 PM   #21
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Originally Posted by Lisa99
Total cash flow once paid off will be $10,392/year which includes the management fee and taxes which is a 7.7% return on our money.
Does it also include estimates for vacancy, maintenance, and repairs?

Originally Posted by Lisa99
Thanks for everyone's input. A couple of people have asked if we can refinance to a lower rate.

The mortgage is specifically for an 'investment property'. We might could get a slightly lower rate but it wouldn't be low enough to make refi worth it.
Still worth checking in to. We're getting 5.25% right now on our investment properties.

In terms of the original question, one other thing to consider I don't think you mentioned is liquidity. Money invested in equites is a lot easier to liquidate than money in real estate.

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Old 08-10-2011, 02:25 PM   #22
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Originally Posted by calmloki View Post
We took out a loan on our home to pay off a loan on some apartments - money owed is money owed, think that's a part of money being fungible. Back then the interest on the apartments was 9% and after a few refis we are at 3.875% on our home.
Good point.! Get the cheapest money from where you can. Congrats on your rate. !

My mortgage is almost paid off. During the high flying days, I got an equity line against it...primarily so that if we wanted to get a 2nd home I could possibly tap that instead of going to a bank.
At that time they gave me prime minus one. The rate is 2.5% and has been for over 3 years since it follows the fed funds rate. I don't ever intend on paying it totally off as I never expect to see a prime minus one offer again .

And I very well may use this "source of funds"...if we do get that second home we are looking at.

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