Equity

[Precious Thompson]

Is there any negatives to taking equity out of a property to purscase a new one?

[Joe Villeneuve]

Yes, but as long as the first property is still cash flowing I'd do it in a second.  Equity is useless...it's a trophy.  You can't spend a trophy.  If you move the equity into another investment it is back in motion.  Then refi that property too, and repeat as many times as you can.  You will find that you will "use" those funds (now buried in equity) potentially any number of times, but if you refi it out at the last use, you will never spend it.

If you have to acquire new funds for each property you buy, that is a new set of funds that "is" spent, on each deal, all added up to a total amount spent for all the properties you end up buying.  Remember, you can accomplish the same number of houses by refinancing, but never actually spend any money.

Also keep in mind how long it will take the investor to accumulate the funds needed for each new property.

Joe Villeneuve
REcapSystem
A2REIC