Ditch the Mortgage Maze: Cash Out Refinance Alternative Fuels Investors' Portfolio Growth

In a recent episode of The Smart Property Show, Futurerent CEO Godfrey Dinh shared how investors can unlock equity in their property and implement a systematic framework for building wealth through property investment..

Launched in 2019, Futurent is an alternative platform that enables investors to access equity without the hassle of refinancing.

Dinh said the platform suits every type of investor, whether they want to scale up their portfolio or renovate their properties to maximise rental income and capital gain.

“Property is one of those things where you need to maximise your time in the game, and sometimes that means being able to access your money when you need it without having to go through the complexities of dealing with the banks.”

"In simple terms, Future Rent is the easiest way for investors to unlock cash from their investment property to either buy more property, finance renovations, or just access liquidity when needed,” he said.

According to Dinh, Futurent differs fundamentally from traditional mortgages, which are designed for the long-term (25-30 year) debt requirements of owner occupiers, rather than the short to medium-term capital requirements of property investors.

“To buy property, you have your debt and you have your equity, and you can't move forward or grow without both of those things.”

“Traditionally, investors have to refinance to access their capital, but in reality it's hugely inefficient from a time perspective and it's hugely expensive because when you look at say accessing $100,000 in terms of topping up your mortgage, you're probably going to pay over $100,000 worth of interest over the life of that loan.”

Dinh said that through Futurent, investors can access up to $100,000 per property and up to $500,000 per client using a property based approval.

“We don’t dive into anyone’s personal finances. We look at what the property's worth, what the existing loan is on the property, and we let people cash out half the equity that they've got in the property.”

The process uses a “concurrent lease” agreement, where Futurerent provides an upfront rental prepayment, which is recouped from a portion of the rent generally over three years, enabling the owner to cash out an amount upfront while continuing to earn some rental income over the term.

“Essentially, we give the owner a rental prepayment, and we’re entitled to a fixed amount of rent back from the property from a percentage of the rent paid by the tenant.”

“So owners know exactly what it's going to cost them, how much they can get ahead and what amount they will still receive from their rental income to meet their properties' expenses,” he said.

Dinh said that access to investment capital and the ability to recycle equity is key to scaling an investment property portfolio and building wealth through property..

According to Dinh, the most successful property investors build a successful portfolio by following the five key principles: summarised the “POWER” Playbook – Potential, Oxygen, Wealth Creation, Equity, and Recycle.

“These principles are the essential ingredients that allow investors to build a large portfolio of assets that over the long term will make you real wealth.”

The first principle, Potential, means that investors need to look beyond what a property is today and visualise what it could be worth in the future based on the current and future relative values, demographics and surrounding environment.

“Whether it’s buying the worst house on the best street, in a gentrifying area, or a large lot with development upside” he said.

“You don't have to reinvent the wheel or do anything too crazy, you just need to buy good quality property that's got potential to appreciate in value.”

Dinh said Oxygen refers to strategically using and enhancing your income, both personal and rental income, as the fuel to drive borrowing power and portfolio growth, with strategies like adding granny flats to boost rental income and unlock the capacity to invest in more properties.

The Wealth Creation principle of the POWER Playbook discusses the unique characteristics of property that make it an exceptional wealth-building tool, including capital growth and preservation as a hedge against inflation, tax advantages, and the power of leverage to amplify returns..

The fourth principle, Equity, encourages investors to master the metrics that really matter—not just property value, but the capital return on your actual investment (your equity). By understanding how to optimise your capital structure to extract lazy equity

and accumulate the largest asset base possible, you can maximise your absolute dollar earn and your equity returns.

Lastly, Recycle refers to the systematic processes involved in converting theoretical equity growth into usable capital that can be multiplied through leverage and redeployed into

additional assets, creating a compounding effect that dramatically accelerates wealth creation..

“Futurent and the POWER ebook are about empowering and helping investors grow - investors can access a free copy of the Power Playbook at https://futurerent.com.au/spi” he said.

“We are helping investors do more with their property portfolios, create wealth over the long term and stay in the game long enough to fully bake the cake and get the net asset position that they need,” Dinh concluded.

Listen more here: https://www.smartpropertyinvestment.com.au/investor-strategy/26553-skip-the-bank-how-investors-can-cash-out-without-refinancing-and-the-power-playbook

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