Refinancing Real Estate Investments
by: Steve Gillman
Why should you consider refinancing real estate investments instead of selling them? Maybe you've owned a rental property for years, you've paid down the mortgage, the value is up, and you want to cash in on that equity. You will do better to refinance. Here's why.
There are two problems with selling. First, selling means paying a large capital gains tax. You can avoid this if you reinvest through a 1031 exchange, but then the point is that you want your money, right? Second, you'll be giving up your inflation-indexed retirement plan. A good rental property generates more income as rents go up.
Refinancing Real Estate Investments Is Better
If you refinance, you can get much of your gain out of the property, without paying a penny in taxes. You see, borrowing money is not a taxable event. Take your loan proceeds and spend them however you want, and still keep your rentals. Doesn't that sound better than losing a big chunk of your equity to taxes?
Now, let's look at an example. We'll suppose you have owned a small apartment building for several years. Let's say you bought it for $340,000, with a down payment of $80,000. Interest rates at the time were at 9.5%, giving you a payment of $2,106 monthly on the balance of $260,00 (30 year amortization).
The property is now worth $560,000, and you owe $220,000. Your cash flow is around $2000/month. Now, how do you get at some of that equity? If you sell, you will give up the income, AND pay a big part of the profit in taxes. What happens if you refinance?
If a bank will loan you 70% of the value, that would be $392,000. Pay off the first mortgage, and you are left with $172,000. You can spend it any way you want, and no taxes are due.
It gets even better, especially when interest rates are low. If the new interest rate is 6.5%, your new payment will be $2295. In other words, you get $172,000 to spend any way you want, and you still have over $1,800 cash flow each month, from an inflation-indexed retirement plan.
Here is an even better scenario: Spend $50,000 of the loan for high-return upgrades to the property, such as carports and a laundry room, and raise the rents. You could have $122,000 left over to spend any way you want, AND have higher cash flow than before! Isn't that sound better than selling your retirement plan? When you want that cash, consider refinancing real estate investments.
About The Author
Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com.
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Refinancing Real Estate Investments
Refinancing Real Estate Investments
by: Steve Gillman
Why should you consider refinancing real estate investments instead of selling them? Maybe you've owned a rental property for years, you've paid down the mortgage, the value is up, and you want to cash in on that equity. You will do better to refinance. Here's why.
There are two problems with selling. First, selling means paying a large capital gains tax. You can avoid this if you reinvest through a 1031 exchange, but then the point is that you want your money, right? Second, you'll be giving up your inflation-indexed retirement plan. A good rental property generates more income as rents go up.
Refinancing Real Estate Investments Is Better
If you refinance, you can get much of your gain out of the property, without paying a penny in taxes. You see, borrowing money is not a taxable event. Take your loan proceeds and spend them however you want, and still keep your rentals. Doesn't...
Refinancing Real Estate Investments
Real estate > Refinancing Real Estate Investments
Why Real Estate Investment?
Why Real Estate Investment?
by: Rik Foote
Why should you invest in real estate?
Well, investing in real estate for profit is one of the most popular approaches to generating additional income in the United States today.
In fact, if you pay attention to recent press you will have seen numerous reports about the real estate investment craze that seems to be sweeping the Nation.
When done carefully and intelligently, real estate can yield fantastic benefits that can not be achieved through any other type of investment.
Here are just a few examples of why real estate investing can be such a powerful wealth generator.
1. Real Estate Markets Are Slow to React - Although real estate, like everything else, has ups and downs, it is generally a lot slower to react than the stock market.
For example, you won?t get up in the morning and discover that your real estate investment is worth ten or twenty percent less...
Real estate > Why Real Estate Investment?
Real Estate Market Conditions
Real Estate Market Conditions
by: Kim Polinsky
The winter season gives real estate agent/brokers a chance to sit back and evaluate the previous season-Yes? No! These days, the chance to sit back is merely a dream. Agents and Brokers must build their business with new market niches in order to stay on top of their field.
Yes, the ?bubble? has burst. Burst into a finely tuned, quickly burning engine that has grown to a new level of expertise and profits!! Real estate marketing IS changing, and the newer, inexperienced, hungry agent/broker is finding a level playing field on the new path of real estate.
Recently, the trade is encouraged by the fact that this year, unseasonably warm temperatures found across the nation are fueling not just tourism. The warm temperatures are attracting ready and willing buyers, matched with sellers willing to turn some profit.
Mountains in Colorado, beaches in California, the list goes on and on regarding...
Real estate > Real Estate Market Conditions
Real Estate Investing Works In Your Area Too!
Real Estate Investing Works In Your Area Too!
by: Josh Brown
I hope you had a spectacular weekend!
Things have been going great here at Investor Wealth Academy, and we are very excited about some major developments coming down the line for us later this summer.
More on that later.
Last Friday I was on the phone with a perspective client of ours. Let?s call him ?Jeff?. Now, I have to be honest with you here, what Jeff had to say during our conversation was very bothersome to me, and by the end of the call I finally had to tell him that before we Could help him succeed, he?d have to change his perception about the Business.
After thinking about his comments all weekend I realized that Jeff's limiting beliefs are probably more common than I?d like to admit. But how can I help people change their perceptions?
Then, I was browsing around in my neighborhood Barnes & Noble yesterday, looking for a good read, when the newest...
Real Estate Investing Works In Your Area Too!
Real estate > Real Estate Investing Works In Your Area Too!
Refinancing Real Estate Investments
Refinancing Real Estate Investments
by: Steve Gillman
Why should you consider refinancing real estate investments instead of selling them? Maybe you've owned a rental property for years, you've paid down the mortgage, the value is up, and you want to cash in on that equity. You will do better to refinance. Here's why.
There are two problems with selling. First, selling means paying a large capital gains tax. You can avoid this if you reinvest through a 1031 exchange, but then the point is that you want your money, right? Second, you'll be giving up your inflation-indexed retirement plan. A good rental property generates more income as rents go up.
Refinancing Real Estate Investments Is Better
If you refinance, you can get much of your gain out of the property, without paying a penny in taxes. You see, borrowing money is not a taxable event. Take your loan proceeds and spend them however you want, and still keep your rentals. Doesn't...
Refinancing Real Estate Investments
Real estate > Refinancing Real Estate Investments
Why Do Real Estate Agents Need Websites?
Why Do Real Estate Agents Need Websites?
by: Madison Lockwood
There is no question that the advent of the internet as an ecommerce hosting tool has transformed the real estate industry. The internet is a particularly well qualified platform for real estate presentation. Today's large real estate websites will sort available properties by area and then present them with a combination of written information, photos and often video segments. Nationwide firms such as Coldwell Banker operate sites that act as national listing services.
A home buyer can now do his initial research seated in front of a computer terminal. The traditional approach of contacting an agent and having the agent arrange for home viewings that may or may not suit the client is no longer the first step. Today, the home buyer can select a range of houses suitable for viewing on the internet and then have a real estate agent arrange the home visits.
This new reality means...
Why Do Real Estate Agents Need Websites?
Real estate > Why Do Real Estate Agents Need Websites?
Real estate
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