Cash out refinance question
My partner and I are making cash offers on duplexes. We have some of our own money and some investor money. Our strategy is to acquire properties at a 25% discount so we can refinance with a bank and get the 75% LTV back out as cash. This ensures we can pay back our investors. How do we go about feeling confidence the appraisal will be in line with our research and expectations?
Example: Purchase duplex for 50k cash when it is listed for 70k. Refinance and get 75% of the "appraised" value, hopefully around 70k. 75% of this is $52,500, which covers the cash we need to get out of it.
I am going to review this with some local appraisal companies to get their feedback. Has anyone had this same concern and how did you overcome it or feel comfortable with what you expected the property to apprasie for?