Cash out Refi on Current Home for Investment Property

[Jonah Kubath]

I want to buy my first rental property.  I decided to call a CPA in the Washington DC area and he informed me that cannot claim the deductions on mortgage interest when you do a cash out refi.  He also said that the money taken out is supposed to be used on same property since that is the asset backing the loan.  I thought that Brandon has used the Cash out Refi process to re-purpose the value gained on a property to purchase a new one.

Can someone help me understand this, a better way to do the cash out refi, or should I call a different CPA?

Thanks

[Steven Goldman]

I will leave the internal revenue service issue to your accountant. On the financing issue, if you are using the money for a business purpose than you are permitted to use that money to purchase additional properties or for any other legitimate business purpose. It does not have to be reinvested in the property. Good luck!