BRRR cashout questions (tax related)

[John Kwon]

So interest rates are tanking so I was about to refinance and take cashout from some properties.

But, speaking with my accountant, I found out that interest on the refi will not be tax deductible because I am not planning to improve the property.

So this mean that BRRRR method is no longer a good method at least from tax deduction point?

Thought?

[Guifre Mora]

Originally posted by @John Kwon:

So interest rates are tanking so I was about to refinance and take cashout from some properties.

But, speaking with my accountant, I found out that interest on the refi will not be tax deductible because I am not planning to improve the property.

So this mean that BRRRR method is no longer a good method at least from tax deduction point?

Thought?

 Yup, your expert CPA is correct. You can deduct that conversation with your CPA.

BRRRR is never about taxes. I don't see a T in BRRRR. Taxes are Taxes and never will go away. There are many strategies to pay fewer taxes in RE but pay you must.

BRRRR is about ROI, Cash Flow, Wealth and Acquiring Real Estate, not taxes. There are huge advantages to owning RE and one of the perks is tax deductions. But so what if you cant deduct your interest, you can deduct: Advertising/Marketing, Leasing Commissions, Professional Fees (Legal, Accounting, etc.), Taxes (Property & Other), Depreciation, Business Mileage, Education & Training, Bank Fees, Employees, and Independent Contractors, Repairs and Maintenance, Insurance, Property Management Fees, Supplies, Utilities (Oil, Gas, Electric, Water, Phone, etc.), Home Office Expenses, Travel Expenses, Snow Removal, Landscaping, Pest Control, etc., HOA Fees, Business Meals (50% deductible), that doesn't stop you from cash flowing growing equity and someday retiring wealthy.