I’m going to lay out all the numbers here and hopefully some people will chime in with their thoughts. 1 bed/ 1 bath condo in north New Jersey (~10 min bus ride to midtown Manhattan)May 2016 Purchase price: $270kDown payment: $54k (plus 10k in closing costs)Current market value (best estimate): $325kMortgage remaining today: $205kCash flow per month as rental: $300The way I am looking at this is I am deriving my “net equity” (net of selling closing costs) to be:$325k x 94% = ~305k, less 205k (mortgage remaining) = $100k net equity.Therefore, my RoE on an annual basis is $300 monthly cash flow x 12 = $3,600 divided by my net equity of $100k = 3.6%On one hand, it seems like I could use that $100k elsewhere and likely beat 3.6%.

In fact, it's standard to "leave meat on the bone" for the next buyer, so they deliberately will not complete every possible improvement to the property, and then the property can be marketed as such to the next buyer, along the lines of "25 units have been upgraded and the rents are $50 higher.

I'm interested in flip and fix and buy/hold down the line.

Bottom Line Up Front (BLUF): if I use a personal friend to loan me money to buy my first property, can I still use the “cash out” REFI technique with a bank in my BRRRR strategy?

That's nearly $63,000 profit. . . . that'll get me out of bed in the mornings. 

Henry, just as an example, I just yesterday picked up a 4 bed 2 bath 1532 sq ft in Phoenix by taking over their loan of $169,000 using Subject To and giving them $5,000.

Using skype like that is almost as fast as a single line mojo and much much cheaper.

This foreclosure is in a beautiful area, 4 bed 2 bath and i have about 60,000 in equity.  

There are lots of great Buffalo people active here so dont hesitate to drop any of us a line with questions. 

Ive considered doing a 1031 exchange on the property as well as a HELOC or unsecured line of credit among other things.