Cross-Collateralization and is it best to use for $50k loan
This is a path I have never taken and not familiar with the full process so hopefully some of you could advise me on different ways I could accomplish my goal. I have multiple properties and all but one I have done a BRRR on. Taken equity out, not all of it, and getting some cash flow on monthly rents. I am looking at a different venture in hospitality. I have a hotel where owner will finance it for me with a down payment. Would the best way to get $50k for down payment be just to pull out a business loan? Or could I use one or more of my properties to cross collateralize for that loan with better or different terms? I have one property still under a fix and flip and will go into a perm after appraisal returns that would have about that much equity built in it already. Would this cross collateral work best for these funds? I cannot get the full $450k loan on hotel as it is not US based so wanted to take that answer off the shelf. Thank you all in advance for any advice.
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Congrats on the opportunity for a new business venture. Where the $50k comes from is ultimately up to you and how you do your internal accounting. Pulling it from the fix & flip is probably going to provide you with the best terms since there is a physical asset attached to the financing. If you go with a business (this option may be rather difficult for a foreign business) or personal loan there is no physical collateral so the interest rates are naturally higher since you are personally guaranteeing it.
Cash-out refi is probably the cleanest, simplest, and best terms approach. You are effectively pulling cash out of your RE investments to explore a new hospitality venture.