Cash-out of Equity for Cash Purchases

[Geoffrey Vallee]

Good day, BP Team. I have a question about accessing equity I have built over tie in rental properties I currently have in a buy and hold strategy.

Background:

I own four rental properties that I am interested in drawing equity from, and these have about 52% equity (about 48% serviced by debt). Two of the properties are SFH in one state, one property is a condo in the state, and one property is a SFH in another state.

SFH out of state 3.875% 30-year, Condo 4.375% 15-year, other two SFHs 4.375% 30-year.

Assumptions:

These properties are all in service as rentals and will be treated as rental properties in traditional refinancing (higher interest rates).

Even with low interest rates, refinancing these as rentals may not result in a lower interest rate on each property. 

Approximately half of the equity can be chased out leaving 20-25% equity in the properties at today's appraisal values.

Facts:

The SFH's are good buy and hold properties. I do not intend to sell these.

I am considering selling the condo if refinance does not make sense.

Questions:

What are the options, other than sell and traditional refinance, for recovering that equity into cash to leverage the equity as cash in order to be able to purchase distressed properties with cash? What are the pro's and con's of these options? I know there are limitless ways to work financing, but I am most interested in understanding the best ways to access the equity I have built. Thank you for any advice you may have.