Cash to refinance - confused

[Amaf J.]

Hello everyone,

I have a quick question based on a scenario that I'm going through right now and I was looking for some help.

I'm working with a local investor in the area that purchases homes for other investors. He found a property for $33,000 in distressed condition. It's going to take about $14,000 in repairs to fix it up to get rental ready. After repairing the single family house, it will rent for around $1,100 a month. So we're looking at $47,000 all in with repairs and the comp's are showing the houses in the area selling for around $75,000. 

The investor knows a local bank that provides commercial blanket loans for portfolios on a 20-year loan. They give 80% of the assessed value of the home after the repair.

Now if I use all cash and leverage re-financing after the repair, how does this all play out, number wise?

The bank gives 80% of the $75,000 which comes out to $60,000 which is well below what I have in it. It's about $13,000 profit or equity in the deal. Now do I have the ability to cash out that full $60,000? And just pay the mortgage on the $60,000? I'm trying to make this beneficial to use leverage after the repairs and use the funds towards another purchase. Any insight would help me out tremendously.