putting 20% down ..... Immediate Equity ?

[Michael Dunn]

I have a quick question relating to putting 20% down on a property ( Buying it as an Investment property vs as an O.O. )

When we put this 20% down ..... this is immediate Equity , correct ?

So how would this work , as far as getting to borrow that full 20% via a Cash-Out refi. ?

Would the house have to have $40,000 in Equity ( 80% LTV on a $100,000 property = $20,000 + the 20% that I'd have to put down .... which too would be $20,000 )

Thank you for any input and help

[Andrew Syrios]

The $20,000 would be immediate equity but you would have lost that cash. Assuming you were getting an 80% LTV loan, you would need the house to appraise for 20% more than everything you have into to get a full cash out refinance. So if you put in $20,000 on a $100,000 home, you would need it to appraise for $125,000 (80% X $125,000 = $100,000) plus probably a little extra to pay the loan fees, to get fully cashed out.