Cash Out on payed off rental??

[David C.]

I apologize in advance if this is a stupid question.

My understanding is that you can Refi a rental property and cash out on the increased equity/value with a new loan, and the proceeds are non-taxable. The BRRR concept.

That being said, what happens in the case of a property that has been paid off completely?

Can you obtain a new loan on that rental, and the proceeding equity from it would be non-taxable?

Side note: This is a situation that in hindsight I would have refi-cashed out and repeated long before the loan was completely paid off to use for future opportunities.  Live and learn I suppose.