Not sure about the "more cash than you started with" part, but you might be talking about the refinance "R" of the strategy.

What I mean is if I get the seller to take an unsecured note (with a better interest rate to compensate him on additional risk), will that debt be counted as part of the "loan" in an LTV assessment if I try to get the property refinanced in a year (essentially will that note amount become instant equity for me which I can play with?).

Jake Stenziano and @Gino Barbaro will show how they have bought, repositioned and refinanced multifamily properties in the Knoxville MSA and Steve Goldman, one of the top multifamily brokers in TN will give details of the overall demand for rental investments in East Tennessee.Additionally there will be details of how investors can access fix & flip funding for both single family and small multifamily properties.Hope to see you there.VictorVictor

What are the disadvantages of refinancing other than higher mortgage and refinancing fees?

By using a Private Money Lender to fund the deal and maybe the repairs - and then refinancing later into a long term mortgage, you can spend nothing.

However, I did discover that the property was refinanced in 2004 and I found foreclosure filings from late 2010 to early 2011 (appointment of substitute trustee, etc).

Crystal,You could use the BRRR strategy, which involves using a hard money lender to buy the property and then rehabbing and renting out the property and ultimately refinancing with a traditional loan.

I refinanced a property about four months ago, and when rates dropped over the summer, I began the process of refinancing again.  

Has your friend considered the option of private lending with the possibility of refinancing later on?

Good afternoon everyone,I bought a coop 6 years ago. I owe about 50K on it at 5% interest rate. Similar units in my building are going for over $250K.I'm thinking about buying an investment property. I started thinkin...