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Updated almost 10 years ago on . Most recent reply

User Stats

145
Posts
71
Votes
Terrence Evans
  • Investor
  • Lomita, CA
71
Votes |
145
Posts

Exit strategy after acquiring a property with built-in equity

Terrence Evans
  • Investor
  • Lomita, CA
Posted

Let's say I come across a deal where the owner had to move quickly and they sell their house at a discount. It is worth 600k but they sell it to me for 520k. I use a private money or hard money loan to buy it. Btw the property needs nothing as it was rehabbed a year ago. I only have to do a basic paint and carpet rehab for less than 10k. So in all I have a property that on paper has $70k of equity, less any holding costs due to the P/HML.

So how can I get this equity out? 

  • I could sell it now.  My profit would be cut in half due to commissions. But not terrible given that I basically am doing nothing to get said profit
  • I could refi and rent it provided that i was cash flow positive.
  • Is it possible to refi and either do cash out or get a 2nd HELOC to get money out? I thought cash out wasn't possible because I'm already above typical LTV maximums.

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