Cash Out Refinance Explained!

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[TheJoshua]

-96, 000 New loan with construction = 25% down plus closing costs *About 30k out of pocket*
-New Appraised value is 170k (after reno)
bank lets you borrow 75-80% of that = 127k
- Pay off lender 127k - 96k= 31k back in your pocket
( You get your money back its not profit)
You just have a property that the tenant pays for
BRRRR is a long term gain to wait for rents to go up over time

[jjeverson]

In what city are you buying a 56k home?

[stevel]

Then with the new loan comes a much higher monthly payment to you the owner. You need to check every box on location, rehab cost, market trend etc otherwise you’ve just priced yourself out of anyone wanting to rent your property after dumping a ton of $ into it. That monthly needs to be paid no matter what

[pueraeternus]

If you keep spending the cash out refinance to buy more properties, how do you actually make money to spend on yourself, like buying a car?

[ericventura]

So is the original loan under your name and when you went to get the second loan was that under your name as well or do you use 2 different LLCs?

[jalisco]

That only works if interest rates are low ?

[thesmartguyy]

What do you do if the tenant moves out or even worse, decides to stop paying?

[JUSTYN]

Does this apply when you purchase a property cash from a wholesaler ?

[drexelspivey]

I just can’t wrap my head around it and I’m trying to get into real estate but I can’t understand it. Do you use a heloc or home equity to buy an undervalued place, fix it up, and then it’s a higher value. You then take a heloc out on that to pay the other heloc and pocket the difference ? I just can’t wrap my head around it and I’m frustrated

[RoyallKing]

The money that you kept for yourself so you have to pay that back to the bank?

[Hallowsaw]

So now instead of having $400 a month(including the reno cost) payment you have a $700 payment that if the resident does not pay you are in worse shape. Why wouldnt you just charge what you would for a 170k house which is about 1200 a month and pocket 800+ a month.

[thatsarapyt]

Where does the profit occur? Why wouldn’t you just buy and refurbish the house for 96, 000, get it appraised at 170, 000, sell it and profit $74, 000 taxed??

Correct me if I’m wrong but in this scenario you owe 127, 000 loan and only made $30, 000. That’s a $100, 000 loss???

[aarongruber]

So your telling me I can take 100 k loan if I had the chance and put it into a house I will pay the interest but the 100k won’t get added into the mortgage cause wtf how first the 100 k loan get added onto say a 100 k house do you really just pay back the bank as you get the rent and when your paid off house free cash flow comes

[Bigdogstusks]

I call BS on that. You’re not buying a house for £56k and turning it into a 170k house by spending 40k on it. It’s not tax free as you’ll pay interest on the loan and if you have a portfolio of properties that you keep refinancing you won’t have enough money to pay the CGT and won’t be able to sell the house. These people make me Fricking mad. Scam artists. Only way to make money long term is to actually invest in your properties and not borrow to the max on them. 🤬🤬🤬🤬

[aakivas]

If you paid 96k on the house in total and got 127k from the refinance, you made in total 31k...

Why did she say 27k in the beginning?

[aarongruber]

So I have a portfolio I don’t wanna touch and I want too take a loan out on my assets too refinance into the mortgage but the rent would be alot and interest on top it would be insane this is pissin me the f**k off Right now

[raulduke]

So how did he get a 96k loan for a 56k home?

[stephenmartinez]

How this man bought a 56k home I smell cap

[ivanrazo]

What the difference between cash out refinance vs LTV?

[angelicagonzalez]

What bank refinance when the property is under a business company.?