Turning Equity into Cashflow

[Eric P.]

Let's say that over the course of a few years, you buy 10 properties using BRRRR and they all look like this:

- Purchase price $50k

- Rehab $20k

- 70% Refi based on $100k ARV

So you now own 10 properties, each of which is valued at $100k and carries a $70k mortgage. Congrats - you didn't invest a single penny of your own money and now you've created $300k in equity for yourself! But let's say that the 10 properties are (more or less) cashflow neutral, and now you want to turn that $300k equity gain into cashflow. What's the best way to do this?

The obvious answer is to sell some of the properties and use the profits to pay down the mortgages on the remaining properties. BUT, after transaction costs and taxes, each house sale would result in only $10-$15k of profit (even though you have $30k equity per house). Which means you would have to sell 6 houses just to pay off 1 mortgage!

Is there a more productive, effective way to turn your equity into cashflow?