If you’ve got a stable and profitable rental property, how can you access the equity to grow your portfolio? Should you look into a HELOC or cash-out refinance, and how do you get the process started? That’s our first question on this Q&A Monday!
On this episode of Investing in Real Estate, I’m answering three listener questions about utilizing equity on a rental property, buying investments on credit, and calculating a cash-on-cash return. If you want to hear my advice and experience, this episode is for you!
On this episode you’ll learn:
- How to utilize the equity in a rental property.
- How to use credit to buy a real estate investment.
- What to look for in a cash-on-cash return.
How to Utilize the Equity in a Rental Property
If you have an existing cash-flowing rental property and want to take advantage of your equity, look into a cash out refinance. You might have to search high and low for lenders that are willing to work with you on an investment property. However, it is certainly possible (and worth it). Ultimately you should consider a cash out refinance, pull out that equity, and use it as a down payment to buy your next profitable investment.
How to Use Credit to Buy a Real Estate Investment
In my experience, the best way to use credit to buy real estate is to work with Fund&Grow. Fund&Grow helps their clients secure business lines of credit for an introductory rate of 0%. Think of using credit as another tool in your financial tool belt. For many investors, this is a great way to get started. Then, you can refinance the property before the introductory interest rate expires. Save $500 off your signup fee by visiting morrisinvest.com/funding.
What to Look for in a Cash-on-Cash Return
Remember with finances, there is not a one-size-fits-all model. When it comes to returns, you might have different standards from other investors. However, I implore you to compare your investments to any existing savings accounts or stocks. Also remember that there is no better tax vehicle than real estate. At our company, on the low end you can expect an 8% net cash-on-cash return.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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