Cash out refi to build my portfolio using investor money

[Haider Abdullah]

BP family, Happy Sunday!

I’m thinking of different ways to grow my portfolio and currently, I’m actively flipping in DFW with investor capital.

Here’s a scenario and I’d love to hear how you are doing this:

1. Buy a home for rehab with partner money

2. Rehab home with partner money

3. Once completed, cash out refi (Ive heard minimum 6 months before this can happen?)

4. Pay the investor as if it was hard money at 10% and own the property

I see this a very low cost to entry as the only capital I have to come up with is the difference between what I pay the investor + 10% and the amount I refi the house for. (If there’s a gap)

This will definitely vary based on deal, however, I’m able to leverage no interest money (partner money is non interest) and then maybe as a hedge to not selling the flip, I can employ the above strategy and keep the asset and pay the investor a solid 6 month return (10%).

This adds doors to the portfolio without having to deal with the upfront cash requirement and the house is ready to go and super tenant friendly.

Thoughts?