Updated about 1 year ago on . Most recent reply

Could someone please help…
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.
Most Popular Reply
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.