An investor buys a $100,000 house with $20,000 down, spends $20,000 on renovations to raise it to $200,000, then refinances and pulls out $140,000 tax-free. The tenants pay the mortgage while the investor redeploys that cash into more properties.
You buy a house for $100,000, guys, right? You only put down $20,000. You put 20% down, the bank gives you the other $80,000. You put $20,000 into the property to fix it up. That property now goes up to $200,000. Then you can go ahead and do a cash-out refinance and you could pull out, what, 70%? So remember, you only put in about $40,000 of your own money into the deal. Now you're getting $140,000 out. You can take that $140,000 tax-free, which is the key, yeah, and roll it into buying another asset that's going to make you more money. You ain't paying it, your tenants aren't, right? So why not continue to do that and buy You're trying to close that off.
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