Cash-out Refi question

[Nathan R. Cowger]

My dad and I own a 4-plex in an LLC. We are considering doing a cash-out refi to take some of the equity out and purchase another property. The numbers work on paper. What are the tax implications we need to be aware of? Will we pay capital gains on the amount we cash out?

[John Morgan]

@Nathan R. Cowger

I’ve done five cash out refis. No, you don’t pay any capital gains. I’m doing one right now and will get 245k cash back to play with. I’m a fan of taking dead equity and putting it to use. Keep that money working for you. That’s the way you scale up and get wealthy fast.