For investors looking to buy and hold cash-flowing properties:
Has anyone considered cashing equity out of one property to make a down payment on another? Seems like doing this would speed up the rate you can acquire more doors and build passive income quicker.
There's a couple fintech companies looking to swap equity for a share of appreciation but they don't take a cut of the rental income. An equity "co-investment". I was wondering what people think about this kind of setup?
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
@Susanna J Ask, yes. Pulling equity from one asset to purchase a second is a very common strategy.
I've looked at the fintech model you described. I was not at all impressed. Don't remember the specifics, but basically they value at 75% of MV. A sale of anything above that is considered "appreciation." So, if you have a $100k property and on Monday cut a deal with them, then on Tuesday sell for $100k, you'll owe them their cut of the $25k you "made." No thanks.