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I've been thinking about a cashout refi on an investment property so I have cash on hand if there is a recession to pick up another rental property or 2 at a discount. Then it got me thinking....
I can cash out about $25k give or take and it'll cost me an extra $115 a month vs just refi no cash out. Over a 30 year period that $25k will end up costing me about $40k... but here's were it gets crazy...
If I take $25,000 and invest it over a 30 year period averaging a 8% return it would be over $250,000!!! Why don't more people do this? 8% is the average S&P return, so even if I'm off and the return is half that $125,000 You're still so far ahead it's crazy.
I wouldn't do it now. I am of the opinion that there is a pretty binary case in the stock market now. I think if a Democrat wins in 2020, we are going to see a crash. Not a correction. But a crash. If Trump wins, we will likely see some kind of China deal since they will no longer be trying to wait him out and the market will fly. There is no way on earth I would borrow money in this environment to invest. Too risky.
I have a rental that was paid for in cash when it was built in the 1980s.
I also own half my house.
We aren't able to save a lot like some on these boards.
IF I thought this was a great idea, id be doing it.
As someone said, it MAY work , UNTIL it doesn't.
The real estate will STAY paid for rental and half paid for house.
Heck, I would not even sell the rental to invest the proceeds either.
As someone else said, we are on the cusp of a new election, its iffy right now.
Best of luck to you if you try it...
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