First Flip Funding Strategy

[Laurie Bachorek]

We are getting our ducks in a row for our first Flip and looking for your comments/advice on our strategy. We have about $160k equity 5 years in on our primary residence. Principal balance is $208k at 3.625% (includes PMI). I have a deal on the table to refinance the mortgage and cash out $35,000 for a down payment and rehab costs on the flip. The refi closing costs are $3500 (financed) and would include another consumer loan we would payoff to get our debt to income where it needs to be - $14,000 (also financed). Also will include $35,000 cash out (also financed) to obtain a new mortgage on the flip and any rehab costs. New rate would be 4.625% and no PMI. This deal will put our principal balance at $264k and leave us with a remaining $100k in equity and increase our monthly payment by $80/month - no PMI. I’m thinking this is the cheapest way to fund our seed money. We want to find a property about $100k / no more than $15k rehab cost / resell for $150k. DFW market.. Thanks for any advice or comments you may have on this funding strategy. Cheers!