Sell or refinance access equity?
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[{"id": "f8lpvks", "text": "You don't have to pay cap gains if you do a 1031 exchange. Do you believe there is more upside in the property / opportunity to increase rents? If yes, hold, if not, sell. Not sure if I am that credible tho, I own two fourplexes. Have refinanced each one once. Have never sold. Not sure if I am doing it right either, but this is my understanding.", "replies": [{"id": "f8m4gqf", "text": "This is literally the opposite of accessing the equity. You would roll it into the next property.", "replies": [{"id": "f8m5gsu", "text": "Oops. Good point!  OP, I would just refi if you can!", "replies": [], "depth": 3}, {"id": "f8nw8xd", "text": "Unless the new property could sustain higher leverage...", "replies": [{"id": "f8nxjrq", "text": "Your equity is still trapped.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f8m4r9d", "text": "Selling the property creates reinvestment risk. If you want to keep the asset and access your equity, just do a refi. Your lender will likely size the loan to 1.25x DSCR. You can do the math to see how much proceeds you\u2019d get. If your property is in a high rent growth market, and you expect the future value to appreciate quickly as a result, then you might want to look at something with prepay flex, so you don\u2019t get in a situation where you have significant trapped equity again. Can\u2019t tell if you\u2019re in commercial or residential - if resi, then your typical investment mortgage will likely be based on LTV - assume 65% - and probably won\u2019t have a prepay penalty.", "replies": [], "depth": 1}, {"id": "f8m6n3g", "text": "You could also potentially secure a revolving line of credit against the property, could you not?", "replies": [], "depth": 1}, {"id": "f8n9fma", "text": "What do you plan to do with the equity if you pulled it?", "replies": [], "depth": 1}, {"id": "f8rdl23", "text": "Refinance, pay off existing mortgage and take out the excess proceeds, take a tax free distribution. \n\nIt will reduce your tax basis if you sell in the future but better to pay cap gains than ordinary tax.", "replies": [], "depth": 1}]