Refinance high, buy low if you or a partner have access to sizable amounts of cash, this technique is excellent. You can sometimes buy properties for 75% to 80% of fair market value from people who need to sell for all cash right away.
In one instance, I was contacted by a seller who learned that I bought investment properties. She needed to sell her property immediately and was willing to sell for a substantial discount, provided I pay all cash and close on the property within thirty days. Having an excellent relationship with a title insurance company and some reserve cash in the bank, I was able to do just that. I bought the property after two inspections in two days at a discount for approximately 27% less than its fair market value. Then, by putting a new equity loan on the property, I was able to take out 100% of the cash that I had invested.
Sometimes, after taking title to the property and making a few minor repairs, you can refinance the property and take out even more cash than you invested. You can free up your cash to repeat the process again, and you will have purchased the property at a substantial discount.
Many professional people have cash available to invest under these circumstances. They have neither time nor expertise to go into the marketplace and find properties like this. If you can enter into a working relationship with just one or two of these people, you can not only generate a good yearly cash flow for yourself, but buy many investment properties as well. A win/win situation is created for both of you.
| Specific Situations to Apply Technique #6 |
| Refinance High |
| The Property |
| Property Offered Below Market |
| Unused Room (s) that Could be Rented |
| The Buyer |
| The Seller |
| Needs All Cash for Equity |
| Will Refinance: Wants Short Payoff |
| Must Sell Immediately |
Refinance High To Home Equity Loan