BRRR - How to Cash Out / Refi

[Kyle Weckman]

Hi All,

I mostly understand each step of the BRRR strategy with the exception of the refinance piece. I am wondering, when you refi and pull cash out are people doing that via a line of credit or a home equity loan of the original loan? Are you keeping an 80/20 ratio to avoid PMI and therefore only pulling out the equity you have above that? Are there other options I am missing?

I have 3 units that have a lot of equity and would love to start leveraging it for down payment on additional units instead of saving up each time going forward. My only concern is that if I use a line of credit of home equity loan the interest rates are pretty high and I doubt the numbers would make sense when combine with the other loan needed. 

Any suggestions would be appreciated!

Kyle