How can I turn equity into cash flow?

[Mike Brown]

With the BRRR method, it seems it's a lot easier to accumulate equity than cash flow. For ex., say I buy a $100k property, ARV is $150k, bank gives me 75%, which is $112.5k.

So if I refinance, my monthly cash flow goes down but I get that $112.5k, correct? But I prefer cash flow over equity because I like that steady stream of monthly income coming in. I also don't feel comfortable relying on equity alone if the home market crashes. So my question is how can I turn that big load of equity into a steady stream of cash flow? 

Another question I have is, is it possible to invest that $112.5k into an actual business, like maybe a gas station or store if I find a good opportunity? Is that legal?

Any education for this newbie would be very appreciated!

[Andrew Postell]

@Mike Brown the more equity you have in a property the more it will cash flow. So a property with 100% equity will cash flow great! But usually we are talking about how to acquire MORE properties with AS LITTLE out of pocket as possible. So if I gave you free properties with 20% equity in them, would you take them? That's what the BRRRR is. Even if you don't follow the BRRRR method and just put 25% down on properties your rate of return would be 10% even with just 4% of appreciation. Residential is easier to purchase properties with nothing out of pocket because of the BRRRR. Now, having 25% equity in a property should provide you enough cash flow to certainly make it worth it. That's what most successful investors target - 25%. And you earn income in 3 ways in residential real estate - cash flow, appreciation, and principle buy down.

For commercial real estate you are usually planning on a 4 year return.  So if you BUY and REHAB a commercial property....you usually cannot refinance for 4 years because you need 2 years of P&L's with your higher rents reporting in order to refinance at a higher value.  So commercial is a totally different investment philosophy and method.  There is a good commercial forum here on Bigger Pockets that I would suggest to check out.  

Hope this all makes sense.