Last flip in 2010. I'm a little rusty. Now looking to Buy/Hold...

[Ryan James]

So I did a flip back in 2010 for a house on my street. It was kind of a hoarder house. I talked to the heirs after the mom passed and negotiated a deal to buy it for $40k, then spent $72k renovating (with credit cards and borrowed money), then sold for $224,900 three months later. Net was about $88k. I was told it's not usually that easy and that I got lucky haha. Unfortunately, I have not done another one since so I am rusty. I took my profits and used it to open a business. I was focused on my business for the last 8 years and now have 2 stores for my business and I am finally in a position where I'd like to get back to doing some form of RE investing. 

I'm interested in starting with some buy & hold 3 to 6-plexes. My credit is good now (750+) and I have around $40k (or up to $80k with my line of credit) to use. The only problem I have is that my current home where I live, I still have negative equity of about $25k...I bought it in 2007 and have been paying the mortgage for 11 years and STILL have negative equity! Anyhow, I've been doing alot of reading here on BP over the last few weeks to get "back in the game" and here are some questions I have about moving forward:

1. Should I get pre-qualified/approved first before trying to make offers?
2. I have a wife and 3 kids living at home so I can't house hack. Is it mandatory to put 20% down when purchasing a multi-fam? I do have VA eligibility that I am not using at this time, can I use that for a multi?
3.  I have some money as I mentioned for down payment, but I'd really like to pull my money back out ASAP to free it up, what is the best way to do this? 
4. For example, I found a 5-unit in my area for about $160k. 3 units are rented at $600, the other 2 are vacant. Not sure if I want to do it yet, but hypothetically if at full price, would I have to put down the whole $32k, or what is a good way that I can free up some of my $$ to use for something else shortly after this deal went through?
5. In the scenario above if I purchased at that price, would it be possible to get "other financing" for about 15% of the down payment, then let's say within 2 months I get 2 more renters in there to be at 100% occupancy...at that point can I get a new appraisal and the value will be higher like say $200k? and then I can refinance for 80% of the value of the home...so I could refi for $160k which was original price and pull out all my money and pay back the 2nd lender in full? Just wondering if something like this is feasible?

Any thoughts, suggestions or guidance is appreciated on a good way to get going. Thanks fellow BPers

[Jake S.]

Wow! Still negative on equity?! What a crap deal :/

1. That can't hurt, it's what I did. You can also get into some creative financing (read BP book on no/low money down)

2. I am not certain, but I believe you cannot use VA eligibility on a home you are not residing in.

3. Find a home you can rehab a bit and force appreciation, and over the next 6 months-1 yr (maybe more), you MIGHT be able to refinance your loan to pull some equity out, although I heard this was difficult to do now on rental properties. I'd recommend keeping at least 25% equity in the property (bank may require this) so you are not overleveraged.

4. I recommend reading the BP book on low/no money down. It discusses a lot of creative financing strategies. Great read.

5. Not sure on this one!