BRRR or turnkey when starting out.

[Casanova Brooks]

Good morning BP! 

I wanted to see if I could get some insight from you all! I'm under contract for my second property. On my first property I bought for 18k and put 6k in for rehab, I got the internal evaluation back and it came back at 65k. So I have 42k of equity in this property. I do have a LOC which I would need to pay back the total of the 24k so after that, I would be additional the additional to my current LOC. On this new property, there is a tenant already in the property I am acquiring and has no plans of leaving so I wouldn't really be able to rehab that property and pull the equity out to buy a new property.

My question is starting out is it always better to find a brrrr that's vacant rather than turnkey so there is potential rehab and get it refinanced to pull the money out? My understanding also is that if you're using the banks help with funding they must go off the purchase price or 75-80% of appraised value and must use the lesser of the two. This would mean I would have to tie up 10-15k of my own money and wouldn't be able to leverage and scale for a period of time, Thanks for your thoughts!