Charlotte, NC · Member since 2017 · 85 posts · 38 votes
Is there a good way to pull your money out of an investment property after purchasing it with cash as opposed to using financing? For example, a property is purchased in cash, the rehab is done, the property is rented. Is there any way to pull the equity, which would essentially be the value of the house, back out of the deal to repeat the process?
@Michael Clay - I am actually using this strategy now. Admittedly, this is my first BRRRR deal and have not yet gotten to the refinance part.
However, I have talked to my lender. He said that I can get a regular mortgage or potentially a HELOC on the updated property.
To put it in numbers:I am buying a property for $40k cash. Putting $50k of cash into it. Then I am hoping to get the property appraised at $120k such that I can take out an 80% loan (conventional mortgage) to pull the cash invested out and do it again.
Both of those options are contingent on having good income on paper. I'm wondering if there are any options for someone who paid cash and can't show good income for 2 consecutive years. All they have to show is the equity in the property.
I'm pretty sure the answer is no, but I figured I'd ask the forums.
Really the only two options are giving up equity or putting on debt, although there are multiple ways to do this. Regarding debt, there's obviously a bank loan or a HELOC, or you could get a private loan but it will be higher interest probably. With equity, you could obviously sell it, or you could give up part of the ownership to form a partnership. But really, in my opinion, just getting a loan is the best option.