Chattanooga investor needing some tips.

[Frank Williamson]

hello all, I'm new here. I'm in Chattanooga, TN and just got into property investment. Currently have a property that is 90% done with rehab, and looking to weigh my options with it. I have a business partner and we have decided we are definitely going to sell the house to gain capital for our next purchase. We are wondering if we should try a cash out refinance to get some money quickly and then make the rest up when it sells or what could we do? As of right now we own it outright and have redone it with our own cash. I would like to get into a multi family of some sort to retain as a rental in the next couple of projects we start. For whatever reason we are having a tough time with getting financing to try and acquire a multi family. Any info would be greatly appreciated, thanks.

[Jeff Kehl]

@Frank Williamson I have found that it is very important to know, when you purchase a property, what you are trying to do with it (exit strategy) but to also have some alternative strategies. If you bought this house to flip it and you're almost done you should focus on finishing it and selling it and not be distracted by the fact that you want some cash to invest in multi-family.

If you borrow money out of it and then sell it as a flip you will burn a lot of money in fees and transaction costs.

If the house would make a good long-term hold as a rental though, you may want to consider a cash-out refinance, hold the house as a rental and move to your next deal. The key benefit to this is you won't pay tax on the refinance like you will on the flip.

In my area, which is not to far from you, I like to buy properties below market and then remain flexible on my exit. Lower priced properties I assume will be rentals. Higher priced I assume will be flips. I stay flexible on the exit though. I take what the market gives me. Sometimes I sell the rentals and other times I hang onto the flips.