Private investor funding and refinancing

[Lorenz Cornelis]

Hi there,

I have a hypothetical question when it comes to investing with private money (i.e. investors, friends, family,...) without any of your private funds (or a small amount).

Would it be possible/viable to buy property, finance the downpayment with private investors, superficial rehab works and then refinance the loan after 2-5 years, pulling out the equity and return it to the private lender?

e.g. The investor funds $40.000 and receives after 2-5 years $50000 (+25% Return) after refinancing. The property is in my name and I live of the cash-flow + equity that is building up.

Feel free to share your thoughts!