Get Rich Education · Real Estate Investing with Keith Weinhold

How to Borrow Tax-Free Like a Billionaire

·43 min·3 clips

Keith Weinhold reveals how a cash-out refinance lets you borrow tax-free, just like billionaires do with their stock.

This episode of Get Rich Education features host Keith Weinhold and mortgage expert Chaley Ridge, president of Ridge Lending Group, analyzing current mortgage strategies and policies. They explain how everyday investors can use financial tactics similar to those employed by billionaires. The conversation focuses on leveraging real estate equity, administrative policy shifts, and specific loan product mechanics. Weinhold introduces the concept of a cash-out refinance as a method to borrow tax-free money against property equity, similar to how billionaires borrow against stock portfolios. Comedian Trevor Noah's clip is used to humorously illustrate the paradox of using unrealized gains as collateral without incurring taxes. Chaley Ridge details how title insurance remains a non-optional cost for lenders, protecting against liens and ownership fraud despite blockchain speculation. She notes a significant increase in credit report fees, from around $25 to over $100 for joint applications recently. The discussion covers discount points, explaining that zero-point options are largely unavailable for investment properties in the current higher-rate environment due to risks in the mortgage-backed securities market. Ridge provides a break-even formula: divide the point cost by the monthly payment savings to determine the recoup timeline. The administration's new FHFA director, Bill Pulte, is soliciting feedback, with Mortgage Brokers Association president Jim Neighbors advocating to eliminate Loan Level Price Adjustments (LLPAs) for investment properties. Neighbors argues these fees aren't based on updated risk data, as investor loans often show strong credit and low default rates. There is also a proposal to reduce the "seasoning" period for cash-out refinances on investment properties from 12 months to six. A surprising insight is that default rates on investor mortgages are notably low post-2008, thanks to stricter qualifications like higher down payments and credit scores. Ridge reveals that the average national loan-to-value ratio is 47%, meaning many borrowers are under-leveraged and sitting on "dead equity." She observes a growing trend of "pad splits," where investors buy properties to rent out individual rooms for higher profitability. The episode clarifies that second mortgages for non-owner-occupied properties often have rates tied to the prime rate, potentially ranging from 7.5% to 12%. Ridge emphasizes that a lender specializing in investors, like hers, will provide strategic guidance to avoid actions that could hinder future deals, a service general mortgage companies might not offer. The tone is educational and conversational, blending expert explanation with relatable examples and light humor. The style is interview-based, with the host posing practical questions to a seasoned industry insider. Real estate investors seeking to optimize leverage and understand regulatory changes will find this episode highly valuable. Listeners looking for basic personal finance advice or those with no interest in real estate or mortgage mechanics should skip it.

As heard by us

Mortgage math, equity planning, and policy risk, all reduced to cost-versus-savings questions.

Get Rich Education treats mortgage shopping as a numbers problem, not a vibes problem: title insurance, discount points, payoff timing, and whether a cash-out refinance makes sense as tax-free borrowing.

Read the full review in PlayNext →

Why you'd press play

You want the refinance math before you hand over closing-table cash.

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from Get Rich Education