Use inlaws home for a refi to start REI strategy? Need help

[Justin Young]

Aloha BP!

I've been trying to think of ways to finance deals after cash reserves are depleted so that I can scale this business up and acquire more investment properties to supplement my family's expenses for years to come. Honestly, this is one of the more difficult aspects to figure out. I don't own a property yet but am currently in the process of acquiring one.

But reading another member's strategy to use her in-laws rental property to do a cash-out refi to renovate the home, increase value, house hack then move a tenant in to pay down the mortgage while paying back her in-laws the money she borrowed from them. This got me thinking about a possible strategy for myself. I live with my in-laws right now and I'm unsure how much equity they have (and I don't know how I would ask for this information, but they do trust me because they know I'm financially stable) but knowing that Hawai'i is a market that has high demand, their home is in an ideal area, and they haven't refi'd for more than 12 years, I would assume that they have sitting equity not doing anyone a favor.

Assuming they do have equity to use, would it be possible to have them refi their home, I use that finance deals that I see fit which for now would most likely be out-of-state, then repay them the amount borrowed plus interest. Are there any members that have used this approach and created a win-win situation for both parties involved? I'm don't know how to run the numbers so it works out for both sides because I just thought of this recently, so please provide me insight vice put me down. If its a bad idea, just let me know why, at the very least.

In doing this strategy, I'm not concerned with "giving up" any cashflow for the short-term. By right, I think that all the cashflow should go back to my in-laws until they are paid back in full plus interest. The reason for this is I know that in the end, those properties will bring the cashflow my way.

Am I missing something here or is this a valid strategy to possibly think about? Thank you all in advance. ALOHA!

[Account Closed]

If they have a 2004 mortgage it is probably about 6%.  If they cash out refi'd they could access hundreds of thousands of equity and have about the same mortgage payment at a much lower interest rate.

Is there a family history of helping the generations?  On whose terms?  A lot of cultures in Hawaii are pretty reluctant in allowing access to finances.  What if the in-laws have Heloc'd away their equity for those frequent Vegas trips.  Your asking for money could strain your relationship if they don't want to divulge this information.

Maybe you would be better proving what YOU can do on your own and possibly slowly showing what a family HUI could do.  I'd tread lightly and let the daughter lead the way on this.