Cash out refinance a property & more than double cashflow no money out of pocket!!

[Dan Maegli]

Hello everyone!!

My name is Dan Ko, this is a post I shared last year and wanted to bring it back for anyone who missed it with a couple updated photos of the fourplex we purchased!!

"Cashflow isn't usually going to make you rich off of a couple properties. Many look for $100-$300/door some look for $400-$1000/door.

This is my first duplex, purchased 9 years ago for $100,000. Payment was $800/month, gross rents originally $1070/mo, now $2300/month.

Expenses

Mortgage (taxes & insurance included) $800

Maintenance $150

Capital Expenses $150

Water Bill $100

With very low vacancy, self managed I'm pulling

$2300 minus $1200 in expenses.

Net cashflow $1100/month or $550/door

I just refinanced this property at 75% LTV with a $250,000 appraisal.

My new loan is for $187,000 and my new mortgage payment went from $800/month to $1400/month.

Mortgage (taxes & insurance included) $1400

Maintenance $150

Capital Expenses $150

Water Bill $100

That's now $2300 minus $1800 in expenses.

Net cashflow $500/month or $250/door

I just lost $600/month in cashflow through this refinance but what I gained was a $108,000 check I can now use for a new property.

In fact, I'm under contract for a four family at $320,000. If I take the $108,000 I just gained, put $70,000 into the down payment & closing costs, put the additional $38,000 into updates/repairs once this property is stabilized I will be looking at.

Expenses for new four family

Mortgage (taxes & insurance included) $1935

Maintenance $250

Capital Expenses $250

Water Bill $200

Garbage $100

Shared Electric $65

Total expenses on new purchase are $2800/month

Total rents once renovated & stabilized $4800/month

Total net cashflow on new purchase $2000/month or $500/door

I just went from $1100/month in net cashflow on the first building to $2500/month in net cashflow on both and I did it without having to come up with any cash out of pocket.

Likewise I now get mortgage paydown on almost $450,000 in mortgages as opposed to $100,000 and I get appreciation on $650,000 in assets as opposed to $250,000."