This really just happened … Really!

Posted at June 8, 2022 Posted In Equity Insights Newsletter

You’re going to love this TRUE story! It’s so good that we just couldn’t keep it to ourselves …

This investor just got 93.36% of his purchase price in CASH out within a few days of the property being built.

Approximately seven months ago, Juan Tunavest (ok, not his real name!) closed escrow to purchase a piece of land and build an investment property.

Purchase Price of $179,991 included the land and all construction costs to complete his new Build-to-Rent property.

Here’s a twist …

He closed escrow using 62.63% / $112,726.36 of 1031 Exchange Tax-Deferred Funds from a prior sale.

Pssst …. He called us FIRST to make sure this would all work before going through with this purchase. That’s always a good idea to be safe!

Then, while the property was being built (with mostly 1031 exchange funds) something magical happened …


As completion of the property drew near and the final Certificate of Occupancy became more sure, we built his loan package.

Being a repeat client, we were able to do the heavy lift … no new application needed on his part. And, as mentioned previously, before he even closed escrow on the purchase, we ran his numbers to be sure he would qualify for this subsequent cash-out refi financing!

We locked in his rate 83 days ago on a “To Be Determined” estimated value and loan amount … then, pushed ahead for an underwritten conditional approval.

As soon as the property was completed, we ordered the appraisal (okay, maybe we ordered a bit in advance to make sure everything came together as quickly as possible 😉 ).

Appraised Value came in at … $238,900!

Of course, we immediately adjusted the loan amount to max cash out (75% of the NEW VALUE) and got the file back to the underwriter for final approval.

It’s a few days later and Juan Tunavest (or maybe with another name) is signing off to receive …

$168,032.98 in CASH OUT. That’s 93.36% of his Purchase Price!

But, wait a second …

I thought you had to pay tax on any proceeds from a 1031 Tax-Deferred Exchange that doesn’t roll forward into a next property?

Fortunately, a cash-out refinance is not “proceeds”, it’s a “loan”. And loans aren’t taxed! (Check with your CPA).

Once again, the cash out refinance works wonders in boosting an investor’s tax-savings and portfolio returns!

And if that’s not enough benefit … This move was a big resume booster!

Now this investor has “experience” building a property from the ground-up! If you’ve ever applied for a construction loan, you know this experience on your resume is HUGE … Nice play!

Who do you know talking about a 1031 Exchange?

Pass along this story … We’re here to help!

To discuss your next purchase or refi, click here to schedule a call.

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