How to make this money go the farthest?

[Jedd Braunwarth]

Alright, fun question but also very real! Say I have a property with $150k of equity that I am looking to pull out some or all of that equity to re-invest. I am currently talking to a full time RE investor that has 35 properties (and apartments) in which he would be willing to either do seller financing to me (details on points need to be worked out, hoping for 10-15% down @ 6%) or he has a great relationship with a local bank that he would introduce me to (roughly 20% down @4.6%). Say the 35 properties average in price from $125-$180k. I am not trying to buy all 35 properties but would love to pick the best of the best (cash flow, appreciation, location, etc.) and pick up as many as possible with the equity I pull out.

What method would you use to refinance to take that equity out?

Would I get hit with taxes on that equity if I did seller financing?

Would you try to go seller financing or work with the bank?

How would you make this money go the furthest and make the most deals?

[Gavin Welch]

Jedd, I would research both options.  On the seller financing end... Instead of giving 10 or 15%  upfront ask if they would accept that same amount as payments upfront.  That would allow you to "snowball" a cushion of cash in the case of vacancies and capital repairs.  Just a thought... You never know till you ask.  

The banks typically want around 25% on loans for investment properties, which would limit you to a purchase a max of 4 properties.  

Good Luck

Gavin