Whats a Seasoning period?

[Adam Avinger]

Okay, I would sincerely appreciate some insight on seasoning periods. Currently, I closed on a SFR which also has a detached 600sqft garage apartment, with a tenant currently in it. I got into the home for 120k, estimated rehab is just under 30k, ARV is 215k. Pretty healthy margins! Don't know yet exactly if im planning on flipping or BRRRR. But, in keeping with safe practices I want to plan my exit strategies so that im not left thinking, "well now what do i do?"

Currently I got into the home with a LOC loan, which gave me 80% of the appraised value after planned renovation. this is a 6mo interest only loan at 4.5%. payment is also only calculated at the current amount I have outstanding.

After I rehab, I will be listing to both RENT, and SELL the property at the same time. If i get a buyer who offers asking price, or close to it, I will sell. If not, I have time to screen for tenants i want, rather than need.

Should I end up RENTING, I would like to certainly restructure my LOC to either a 5/2 ARM or a 20yr amortized rate, and pull my remaining equity from the home up to 75% of the ARV, which looks to be about 15k. <---- not an awesome #, but ill still have 25% equity in the home, NET rental income at around 1.1% of my all in investment.

So my question is this. I keep seeing people saying that they are going to wait until the seasoning period ends, and then pull their equity out of the home. Can someone explain to me what this is about? How this can effect this particular deal im doing. and anything I should likely know about this heading down this path?

Thanks in advance, this community is fantastic!

Adam and Tiffany!