Could someone please help…

[Sandra Lopez]

Hello,

I flipped a property. I am unsure if a should cash out and refinance or sale it.

Can someone please explain how the cash out refinance works.

The ARV is 175k. Does that mean I refinance 80% of the ARV of the property and cash out the 20%. Meaning I put in my pocket the 20%?

I am a little confused of how this works.

Thank you in advance for any guidance and recommendations.

[Ash Hegde]

Quote from @Sandra Lopez:

Thank you for your help.

If  cash out refinance the property, how do I paid back the 165k I borrowed (Heloc)?

80%= 200K

20%= 50k cash back to me.

How do I paid back the $165k.

Thank you in advance for your help.

In this case, your new mortgage would be 200k and the check to you would be 200k (less closing costs). You could use that to pay off the 165k HELOC and keep the rest. The 20% (50k) would be your remaining equity in the property. There is no income tax on a refinance.