Refinance + Cash Purchase
Analyze the following property for investment potential. I plan to keep my primary residence and refinance it to purchase the second property outright with no new mortgage. I want to know:
- What is the expected rent for the new property?
- Will that rent cover all monthly expenses for the new property (e.g., taxes, maintenance)?
- If rent exceeds expenses, how much can go toward reducing my refinanced monthly mortgage on my primary residence?
- Or will this investment result in a monthly deficit?
- Also, clearly calculate how much additional cash I need to provide out-of-pocket to cover the difference between the refinance funds and the property purchase price.
🏡 Primary Residence (123 Home)
Address: 123 Home
Market Value: $750,000
Remaining Mortgage Balance: $314,000
Borrowing Limit (80%): 80%
I plan to refinance my home to the maximum allowed and use the loan in new funds to help purchase the second property in cash. Any remaining balance needed will be paid out-of-pocket.
🏠 Property I'm Looking to Purchase
MLS Link: 31 Haxby, Ottawa - https://www.realtor.ca/real-estate/28062869/31-haxby-ottawa-3806-hunt-club-parkgreenboro
Estimated Renovation Cost: $4,000
Monthly Maintenance: $80
Monthly Condo Fee: $0
Other Monthly Costs: $0
Amortization (of Refinance): 30 years
Interest Rate (of Refinance): 3.95%
Payment Frequency: Monthly
🎯 Goals
Please calculate and clearly show:
- 🏷️ Monthly operating costs for the new property
- 💰 Expected rent and net monthly cash flow
- 🔁 How much of that rent can help reduce the $2,119.40 monthly payment on my refinanced mortgage
- 🧾 The exact amount of out-of-pocket cash I need to provide beyond the $286,000 refinance funds
- ✅ Final assessment: Is this investment financially sound?