Nick Perry shows how to turn one house into three using a cash-out refinance. If you own a $100 home with $40 left on the mortgage, refinance to $75, pay off the debt, and pocket $35 to put down on two more properties.
$100
$40
$60
75% of the home's value
$35
Is it possible to turn one house into three houses without taking on any extra loans?
Okay, so let's say you have a house worth $100 and owe $40 on the mortgage. That means you have $60 in equity. Now most banks will let you refinance up to 75% of what the house is worth. So 75% of that $100 house is equal to $75 that you can borrow. So take that new $75 loan, pay off your old dol mortgage and you walk away with 35 in your pocket. Now use that $35 to put down payments on more hundred dollar homes. And that's how you can go from one house to three houses without waiting 20 years.
