Thoughts on my exit strategy?

[Brandon Nappi]

I have flip-flopped again on the best exit strategy.  I'm back to thinking a cash-out refi might be best?   It would allow us to both recoup our initial investment and hold on to the property, granted the monthly cash flow would be significantly decreased with a new loan amount.  However, the tax breaks, income, and left-over equity might outweigh that.  Have a seat, let's run the numbers together: Original Purchase Price:  $82,100 Loan Amount:  $73,890 (that's 10% down) Rehab Cost:  $35,000 ARV:   $150,000 If we were to stay with our Lender for the cash-out refi and do this within 12 months of closing, we can cash-out 75% of the acquisition price plus the reno cost:  $82,100+$35,000=$117,100 x .75 = $87,825 (max amount we could take out) However, we would just want to recoup our initial investment so we can do this again and leave some equity in the home.  So, let's say we only want to take $50,000 out: Our new loan amount would be the $50,000 we cash-out + the $73,890 of our initial loan = $123,890 This would raise our monthly payments of PITI by $295, from $829 to $1123, but we should still be cash flowing a few hundred dollars per month as expected rents are from $1500-$1700.  Plus, we would still have over $25k in equity. Not a bad idea....just have to find out about closing costs for the cash-out refi, interest on cash taken out, etc. but I think it's something we really need to consider.