How do you pull equity out of Property
I am currently interested in Buy and Hold investing and would like to do this by buying distressed properties, rehabbing and renting.
I understand in a fix and flip type of situation (ideally) I would be buying a home for say 50% or ARV, putting in X and hopefully making, say a 30-40K profit (in the market im looking at right now)
My question is, say I buy a home that is in bad condition for 30K, put 20K in to the property which is now worth 90K retail. I rent out the property for $850. How can I then take equity out of my property to help purchase home number 2? Here are the options I think I have
1) HELOC- I have read conflicting information about how banks will not provide a HELOC for investment properties. Is this true? Does it depend on the bank? 80% LTV would mean I could take out $72,000 which would allow me to buy another property and pay for rehab while the first one pays the mortgage and still gives me a small cash flow. Am I missing something or is this a viable strategy?
2) Business Loan- Assuming my credit sucks (though it is about 700) can I take a loan and use the property as collateral to make it easier to be approved?
3) Conventional Mortgage- Take a mortgage on first property? Does rental income count as income? Can I get a mortgage on an investment property?
If anybody could answer any questions or point me where I can get some answers I would love you forever lol.
Thanks