How do you pull equity out of Property

[James Ritter]

I am currently interested in Buy and Hold investing and would like to do this by buying distressed properties, rehabbing and renting.

I understand in a fix and flip type of situation (ideally) I would be buying a home for say 50% or ARV, putting in X and hopefully making, say a 30-40K profit (in the market im looking at right now)

My question is, say I buy a home that is in bad condition for 30K, put 20K in to the property which is now worth 90K retail. I rent out the property for $850. How can I then take equity out of my property to help purchase home number 2? Here are the options I think I have

1) HELOC- I have read conflicting information about how banks will not provide a HELOC for investment properties. Is this true? Does it depend on the bank? 80% LTV would mean I could take out $72,000 which would allow me to buy another property and pay for rehab while the first one pays the mortgage and still gives me a small cash flow. Am I missing something or is this a viable strategy?

2) Business Loan- Assuming my credit sucks (though it is about 700) can I take a loan and use the property as collateral to make it easier to be approved?

3) Conventional Mortgage- Take a mortgage on first property? Does rental income count as income? Can I get a mortgage on an investment property?

If anybody could answer any questions or point me where I can get some answers I would love you forever lol.

Thanks

[Reese Thompson]

My understanding of the seasoning is that it's from when a value last hit the books.  So if you bought it for 30k, they would think it's worth 30k for their seasoning time (6-12 months that I've been told depending on the bank) and you wouldn't get them to look at it again for a different loan until that time is up.  However, and I'm not sure on this part, I think you might be able to get an appraisal after rennovation showing you've made improvements that have increased the value that the bank is then able to override their seasoning time.

For instance, I recently took out a HELOC on my personal property, but I hadn't done any improvements. They wanted a minimum of 1 year since I purchased the property (it was like 14 months at the time), and they sent their appraiser out to look at the place. They allowed the HELOC to go up to 100% LTV.