Refinance - Posted by Clara

Posted by Ed Garcia on May 01, 2003 at 01:03:11:


Believe it or not, they’re both right. Sometimes RE Investing is like playing poker, you have to know when to hold them and know when to fold them.

It’s a matter of know when to make the move.

Leveraging can be done safely, if you have the right deal to go into. Also, many times you can do a deal utilizing another property without really taking a loan against it. We call this cross collateralization. If I were to buy a property below market and know that in a year’s time I could re-finance it and release the property I pledged as additional collateral, that could make sense couldn’t it.

Ed Garcia

Refinance - Posted by Clara

Posted by Clara on May 01, 2003 at 24:29:05:

I’ve read books on Kiyosaki and Dolf De Roos(The Rich Dad Advisors), and they mention pulling equity out, so it can be used as a down payment on another property. Is this the smart thing to do? I’ve read articles and books discouraging it, and I’ve read other articles and books that say that is the way to go. Any suggestions.

Re: Refinance - Posted by James Strange

Posted by James Strange on May 01, 2003 at 01:04:33:

It comes down to numbers. If you can do a cash out refi on one property so that you can do another that will provide a higher rate of return that what the $ will cost it may make sense.

Lets say that you do a cash out refi at 7%. You then use that money as a down payment on a property that you can buy at a ten % discount. And both properties will still have positive cash flow. It is something that you should look at.

If you want to do a cash out refi so that you can live large. That is not a good idea. You will be paying for living large for 30 years.