Pulling Cash Out Of Free And Clear Property

[Andy Pate]

A friend and I are looking to partner up and purchase our first investment House Hack with cash (His capital, I do all the work). The current intention is to purchase that property, utilize some method to pull that cash back out (researching this part) and put the property under an FHA loan or VA Loan (we're both veterans). We would then apply that returned capital to a business concept I've been working on; my friend would be the investor, and I would do everything else. This would allow us to accomplish our end goal of obtaining our first investment property, living rent free, and all the while operating a business together. The current foreseeable problem is that we are both currently new entrepreneurs, meaning we lack a verifiable income to reflect towards a loan, so we may have to utilize a family member to co-sign for the House Hack's loan. My questions:

- Is there a flaw with this generalized plan or a more effective way to go about this?

- What is the most effective route with getting the cash back out of the property? (I've been going through a couple articles comparing refinancing and HELOC and I'm still unsure)

Thanks in advance!