I'm not following cash out refinancing

[Cat Bauer]

I have a few single family long term rental properties and am looking at purchasing a larger commercial property. My realtor advised what most investors do is pay cash for a property, then get a cash out refi after the closing. Regardless of what is thought of this path, I'm having a hard time grasping what cash out refi is and why it's beneficial outside of tax free financing for cap ex. Could someone dumb it down a little? I'm new to commercial financing products.

[Robin Simon]

Cash-Out Refinance is when you already own a property and then you take a new loan on the property while paying down the old loan with some of the new loan (if there is existing debt).  The difference in the new loan and the old loan (plus closing costs) is your "cash-out" - benefit is that its just taking on a new loan, its not income, so there are no income taxes associated with it