BRRRR TAX ADVANTAGES - Hard Money Refinance Corridor Funding

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Hard Money Refinance
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BRRRR TAX ADVANTAGES - Hard Money Refinance
Corridor Funding

• Not long ago, fixing and flipping were the main
  goals of many real estate investors.
• In todays market of high demand and rising home
  values, that formula has changed to buy, rehab,
  rent, refinance and repeat (BRRRR).

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Increasing numbers of experienced investors

• They are following this method to build their
  real estate portfolios by borrowing the equity
  from their rental properties to buy additional
  houses a smart strategy, especially as home
  prices are appreciating and rents are going up.

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• The buy, rehab and rent parts of BRRRR are all
  critical to your success, but dont underestimate
  the importance of the refinance step.
• At Corridor Funding, weve helped many clients
  refinance Fix-and-Flip loans into long-term loans
  that free up their capital to invest in other
  properties.

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BRRRR TAX ADVANTAGES

• The tax advantages with BRRRR are significant.
• When you flip you can make a lot of money
  quickly, but you pay higher taxes.
• Depreciation, the reduction in value of an asset
  over time, is one of the many tax advantages of
  real estate investing. Accelerated depreciation
  is an even bigger benefit to real estate
  investors, allowing them to take a higher
  deduction by claiming the maximum amount of
  depreciation in the first few years of owning a
  property.

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INTRODUCING THE QUICK CLOSE, LOW COST, BUY HOLD
LOAN

• It all starts with refinancing out of the initial
  hard money loan.
• Traditional banks dont recognize that sense of
  urgency, and typically take 2-3 months to close
  on a refinance as they review your bank
  statements, tax returns, paystubs from your first
  job as a teenager, etc.

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This loan builds in several advantages for the
sophisticated real estate investor

• A 60-month loan with payments amortized over 30
  years
• Financed into your LLC or entity of choice
• Your credit report will not show an additional
  mortgage, thus lowering your credit score because
  your debt-to-income went up
• Interest rates currently standing between 6-7
• Fast closing in 2-3 weeks, vs. while our 30-year
  fixed are typically 3-4 weeks
• Youre paying down the principal balance,
  maximizing depreciation deductions, and then
  ultimately you exercise one of two common exits
  1) Cash out refi to buy new properties and create
  more passive income, 2) Sell with owner finance
  (still creating passive income).
• Youre growing your passive income while growing
  equity in your rental property.

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KEY LESSONS FOR REAL ESTATE INVESTORS

• In the current market, homes are in high demand,
  prices are going up and rents are rising too it
  all creates a climate in which buy-and-hold
  investor portfolios can build equity and expand
  their real estate portfolios.
• One of the most important Rs in the BRRRR
  formula is Refinancing. The right loan product
  will maximize your tax benefits while freeing up
  money to pursue other investment properties.
• When youre in a hard money loan, time is of the
  essence. You need to refinance quickly to avoid
  going past your short-term loan maturity date and
  into higher interest and loan extension fees.
• The tax advantages with BRRRR are significant. By
  refinancing, you avoid the taxable event of
  selling the property. In addition, refinancing
  allows you to harness the power of the current
  accelerated depreciation laws.
• Discuss your real estate investing tax strategies
  with your CPA.

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VISIT

• https//corridorfunding.com/