What are my options? Refi? Heloc? Other?

[Jacob Smith]

I'm looking for info on how I should go about using the equity I have for capital to purchase an investment property, or if you have other options, why those options instead.

I'm purchasing my home on a 10 year Land Contract for $60,000. June 2019 we will have lived here 5 years. Zillow estimates our home at $140k (I know that can be way off) I'm thinking cash out refi would be an option to access the equity.

I'm not sure of the steps I need to take. We have an eyesore room, it is a bedroom with a full bathroom in it. No walls or dividers. 

Is this something I should take care of before attempting to get the most equity out? 

Should I do kitchen/bath updating to raise the value before getting an appraisal?

I've been on BP for 1 year, I have attend webinars, listened to podcasts, listened to RE books, I have even done the numbers on multiple properties. I've actually found a SFR that I like the numbers on. Which brings me to my current dilemma.

What would YOU do?

(I'm sure I'm missing some needed info, please just ask)

Thanks for taking the time to read my post. I look forward to the replies.

[Jaysen Medhurst]

@Jacob Smith, I think you need to address the "eyesore room," that's probably not even legal, which will definitely impact a future appraisal. Regarding further upgrades, you have to determine if you'll get the ROI. Most remodels don't add dollar-for-dollar value, and you'll only be able to leverage ~80%, so that's further diminished ROI.

I'd take care of the wall-challenged bathroom and then look into a HELOC. There are very low fees, you don't pay any interest until you actually use the money, and if you're pursuing BRRRR properties, you can recycle that cash once your refi.