pulling cash out without selling the asset

[Jason Schmidt]

i've been reading a book, and it was speaking of leverage. it gave the following example:

price paid : $150,000
down payment : $30,000
original loan : $120,000
appreciation (assuming 1 year @ 6.1%) $9,150

method 1
borrow against equity:
secondary loan: $9150
cash out: $9150

method 2
new loan: $129,150
cash out: $9,150

does this cost anything to do? I guess i just don't understand fully. It sounds almost the same as just getting a credit card with a credit line of $9,150. what am i missing?

[Jim Sharp]

I've made this mistake.

Just my two cents...

Real estate should be about creating products that creates fruits that feed you over and over.

When you buy equity and then continue pulling it out, its like clipping your tree back and never getting the fruits.

Cash flow and time... sweet, ripe and ready for the picking!