Here at Freedom Real Estate Group, we get this question all the time: “How can I get more cash to buy more properties?” Beyond taking out a loan or selling another property, one of the best tools for real estate investors to get more cash is a cash out refinance – or a cash our refi.
WHAT IS A CASH OUT REFI?
A cash out refinance occurs when an investor takes out a new loan on an existing property to extract equity from that property. Cash out refinances happen when an investor refinances for more than the amount currently owed and receives the difference in cash. The cash is then used to invest in a new property or renovate an existing property.
IS A CASH OUT REFI RIGHT FOR ME?
A cash out refinance is typically used by investors who have equity in an existing home or investment property. These investors use a cash out refinance to extract their equity and purchase either a new investment property or renovate an existing investment property. The new loan amount is above the old mortgage balance and the difference is pocketed in cash.
Specifically, a cash out refinance is right for three types of investors:
1) Short-term fix-and-flippers looking to purchase, renovate, and flip a new investment property.
2) Long-term buy-and-hold investors looking to put a down payment on a new property or purchase it with all-cash.
3) Long-term buy-and-hold investors looking to renovate an existing rental property.
I OWN PROPERTIES IN MULTIPLE STATES. IS THAT OKAY?
The answer is yes! Not all lenders may offer a program that works across multiple states. However, some companies do. You can consolidate multiple mortgage payments into one PLUS get cash back to make another purchase!
Buying rental properties or turnkey investments in Dayton and Cincinnati, Ohio, certainly offers a lot of opportunities. However, cash can get low for even the most advanced real estate investor. A cash out refi is a great tool that many use to further their cash for investments.
Interested in more information on a cash out refi? Contact us! We would be happy to refer you to someone that works with clients like you.
**Disclaimer – Contents of this message are of general nature only and should not be relied upon solely when making an investment decision. We are not attorneys or financial advisors and any advice or answers to questions in my communications to you is hypothetical only. If you need legal or financial advice, please consult an attorney or financial advisor of your choice.