Using Equity That Grew in Our Home

[Marek Mlynarski]

Good afternoon BiggerPockets community.

I Have a question regarding the current multi-family home that we own here in NY and i was looking to see if someone could provide me with some advice.

We have a multifamily home which was purchased back in early 2000s. The house was bought with a partner and now we are looking to remove our partner from the deal that way we have full ownership of the property. We agreed to give him about half of what the property is worth, both parties agreed.

For reference, the house is paid off, no mortgage.

We are also looking to take out the equity from our house and use it as a down payment for another property that we are interested in purchasing.

Using a home equity loan or a HELOC, can we use that money to pay the partner off and also use that equity as a downpayment for a property?

For example:

If our house was worth $1million and we took out $600,000. $500,000 to pay off our partner and use the remainder $100,000 for the down payment of another property.

Or would we have to take out a second option?

Would there be any problems with something like that? Would you have any suggestions?