I recently refinanced five of our rental properties. This allows me to get a little more than $280,000 in cash out of my houses tax free. Over all, these houses are still financed at less than 75% of the loan to value. To me, this is responsible leverage, but also prudent business management. By recapitalizing the company with refinancing, we do not pay taxes on the proceeds. While it does not offset my tax base, it does give me additional capital to fund future acquisitions.
My wife and I have been increasingly focused on buying new properties for our rental portfolio in nicer neighborhoods. The business plan is now to continue to acquire new assets, in nicer neighborhoods, and refinance the houses about every 15 to 20 years. We should get to a point to where we are operating not only the business but our personal livelihood off of borrowed capital, that our tenants pay back for us. It’s a tax-free approach that allows us to make half as much but keep more.
Personally, I have been focused on building up my cash flow, balance sheet, and portfolio to where we can retire in the next 18 months. It has been a really fresh approach, and I look forward to talking about this more at the REI Masterminds meeting on August 17 in Rockwall, Texas.
You can apply to join me at the REI Masterminds meeting by clicking here.
If you’d like to learn more about the 30 year fixed interest rate loans I’m using, register for the webinar I’m hosting on August 1st. It is a free webinar for the first 100 attendees. I’ll post a replay afterwards.
When: Aug 1, 2019 [10:00] AM Central Time (US and Canada)
Topic: Refinancing Rental Property
Click Here to register in advance for this webinar. After registering, you will receive a confirmation email containing information about joining the webinar.
Until next time, keep cookin!
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Tim, do you have a replay link on you refi rental properties webinar? Looked interesting and sorry I missed it. I have 4 that are on hard money that I need to get on more conventional financing.
Donnie, here is the link to the replay: https://youtu.be/HRWntqHFazM