Maybe this question belongs on the BRRRR forum. In any case, I'm asking about financing AND BRRRR so I guess it could go in either place.
I have a rental unit (3BR/2BA) that I planned on doing a BRRRR with. I got it before it hit the MLS, purchased with a commercial note and financed the renovation out of pocket with me doing most of the work. I put somewhere between $9k and $10k in it and the ARV is probably in the $145k range. Long story short, I only owe $68k on this place, so I've got some equity in it. It cash flows nicely and I'm getting around $350/mo. net (after cap-x, and other expenses).
So there's the status. Now, here's the question.
I understand the BRRRR method I need to get that extra equity out of it to purchase another and do it all over again. Won't getting that cash out just eliminate any positive cash flow I was able to pull out of this property? I have quite a bit of equity in it, but I can't see getting another unit in this market at the same kind of deal I got on this unit.
Also, I don't really know the benefits of HELOC vs cash out refi. Would you rather do one than the other? If HELOC, how are payments made on that?
Thanks folks!