Exit strategy after acquiring a property with built-in equity
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.