Get Tax-Free Cash by Refinancing Rental Properties. Be Inflation Proof EVENT

No matter where the tornado of the current economy has landed you, anyone with real estate is looking at refinancing rental properties. It’s a whole new world and this one strategy could be what you’re looking for to make inflation your best friend. 

Refinancing rental properties is always an option for you and people do it for many reasons. But the numbers and the strategy must align in these economic times. It isn’t as simple as the rates are still low therefore refinancing rental properties is a no-brainer decision for you. There are serious considerations and calculations that need to be made before you make a devastating choice in a panic. In many markets, the pandemic has skyrocketed the value of single-family homes, motivating investors into refinancing rental properties. But is this the right move for you, will this help you reach your financial goals, right now?

Adiel Gorel, owner of International Capital Group will be hosting the live zoom event to find out the best places to invest in real estate in 2022 and answer all your questions about refinancing to get tax-free cash.

Adiel Gorel states “The biggest market that we ever invested in was the Phoenix, AZ metro area where we bought over 3,000 properties over 21 years. During nearly two years of the pandemic, the prices of those homes went up by, wait for it— over 65%!”

Not every silver lining is a sign of guaranteed success, especially for those of you looking to get rich quick, quick, quick. Are you focusing solely on refinancing rental properties to maximize your investments? The rates have likely lowered since you originally purchased your property, especially because refinancing rental properties means tax-free cash. But what should you do with that tax-free cash is the real question.

Tax-free cash sounds great and it can be great if your strategy for reinvesting that tax-free cash is great as well. The heart and soul of investing, especially in single-family home rentals, is the 30-year fixed-rate loan because that loan stays fixed despite inflation and rising costs of living. A rental property makes inflation becomes your friend. Inflation will continue to erode the real value of a fixed-rate loan day after day, while the tenant is paying the rents which pay off your mortgage. 

Let’s take it a step further, if the interest rate on the old loan is higher, it’s possible to refinance to a much lower rate, and then pull out cash. And indeed, your monthly payment may not even be that much higher when you move down from, say, 7.75% (the rate that many of our investors were getting at the beginning of the 2000s) to 6%. That would be an example of where the numbers make it savvy to be refinancing rental properties and taking your cash out. But again, what to do with that tax-free cash? A very impactful strategy can be put into play for those who understand how to leverage their tax-free cash. Real estate investment loans can be looked at as simple tools to reach your financial goals and can be used in a variety of ways for those who get this, and after the Remote Control Retirement Riches event, Adiel is hosting you will get this inside and out.

When refinancing rental properties solely to improve your rate, without pulling out any cash, it may not be worth it unless the rate improves by at least 1.5%, and preferably 2% or more. Why? Always do the calculations. However, don’t forget the massive benefits of being a long-term investor. With a single-family home in the sunshine states at a 30-year fixed-rate loan, you can choose to do the hardest thing to do in real estate. Nothing! 

Savvy investors simply let these loans pay for themselves over the course of years… and rates will always fluctuate while you’re holding a 30-year fixed-rate loan. Keep in mind that when refinancing rental properties, less than 1.5% improvement is usually not worth it, unless you have a specific strategic need for the cash you will pull out, and can afford the payments. A rental property that's worth about $300k, and an existing $200K loan means there isn’t much cash to pull out.  

Here’s the deal to being successful at refinancing rental properties. When the amount of cash you can pull out is impactful, especially when this amount can be used as a downpayment to buy two or three more rental properties for you locking more of your cash into a 30-year fixed-rate loan, essentially making that cash inflation proof. Moreover, we don't pay taxes on a loan, so here is where you get the tax-free cash. Use that cash to increase the number of homes from one to three or four. You can get a loan at a very good rate for them,

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Created on May 25th 2022 02:17. Viewed 207 times.

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