CASHING IN ON EQUITY WITH A CASH OUT REFINANCE

Capital is the driving force behind every successful investor.

Where to get that cash is the question and the answer is your established equity. As real estate investors, you're constantly acquiring more properties and executing different strategies. Whether that strategy is buy-and-hold or fix-and-flip, one thing you should never overlook as you continue to expand your portfolio is your equity.

Increased equity is the silver lining of today's market and what you choose to do with it is key. Absent (or in lieu of) cash out of pocket, your current investment property(ies) may very well be the gateway to accruing additional wealth through real estate.

For non-owner-occupied residential properties, investors don't have to wait until selling in order to access the equity. With the right capital partner and a strategic refinancing solution, you can tap into the established equity of your properties and pull cash out.

Here's how tapping into your equity can help you expand your portfolio and ultimately provide you with that relief you need to continue doing what you do best.

TOP 5 WAYS TO LEVERAGE YOUR ESTABLISHED EQUITY

1) Pay off a maturing construction loan

Do you have a construction loan maturing that you need to pay off? Avoid the fees and overall stress of getting it complete or selling in time by tapping into the property's equity. You can use that cash to pay off your maturing loan and take the pressure off. As a bonus, you'll most likely refinance into a lower rate so your monthly payments get reduced as well!


2) Access the equity of your listed property before it even sells

Waiting for an offer on your property? Rising interest rates have slowed down the selling market in many areas. Don't miss out on other opportunities while you're waiting for it to sell get cashed up even before the property sells! Along with acquiring more properties, you can also use this cash for other business purpose expenses like renovation costs for another investment property.

 

3) Stay competitive as a cash buyer when acquiring more properties

In many regions the markets are so competitive that if you don't have a cash offer, your offer is automatically out. Today's sellers don't want to wait on any contingencies or financing, so cash offers will get you in the game and help you win the deal. 


4) Tap into the equity of multiple properties and refinance under one loan:

What many investors don't take advantage of is the concept of cross-collateralization. Whether you have a few properties with established equity, or several properties with slimmer amounts of equity, cross-collateralization enables you to tap into the equity of multiple properties at the same time and refinance them together under ONE loan.


5) Use cash out funds to cover renovation costs

Staying liquid throughout a renovation is crucial to not overextending your leverage. As your mid-way through your construction or fix and flip project, the property value goes up. This increased value = increased equity. Pull cash out on that established equity and use those funds to see the remainder of the project through.

Understanding your refinancing options are key to scaling your business. Whatever size your portfolio may be, if your properties have accrued some healthy equity, refinancing with cash-out options gives you the power to go acquire more properties or use towards your current properties.

Have questions? You can find more information on cashing out here!

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