Like all we know and experience in today’s recession, one of the hardest hit businesses in recession today is small businesses, especially real estate business. For small business owners or independent real estate investors, getting around our way around recession can be done by loan management and debt restructure.

I am certainly not a real estate expert, but I understand that, like in any other businesses, smart your way through recession is the key to survival.

With the rising cost of living and interest rates today, it is desirable to have a strong refinancing strategy to help you withstand and rise above the pressure of recession.

Good debt vs. bad debt – a grey area today

I enjoy Robert Kiyosaki’s principle of good debt and bad debt.

Good debt is debt that make you money. Bad debt is debt that lose you money.

In today’s raised interest rates, some good debt investments are becoming, or starting to become, bad debt investments.

How’s this happen?

Some investment properties are no longer having positive cash flow, businesses struggle to pay their debt and keep their cash flow on the green, etc.

One of the most common ways to tackle those situations is by refinancing your debt.

Loan and mortgage refinance

Among many loans, mortgage loans are often being the type of loan that need refinancing.

Facing foreclosures, many property owners turn to refinancing, aiming for a low refinance rates, at least lower than their current mortgage rates.

Saving a half per cent on interest rates can actually make or break your business and investment.

Refinance carefully

Although the concept is good and pretty straightforward – by offering alternatives that will save you more money – you have to take refinancing offers carefully.

Please consider the refinance terms and fees. Refinance is for you if and only if you will yield a significant saving by doing so. If the saving is not significant, chances are your debt refinancing will eventually lose you even more than before you do the refinance.

Know your numbers and calculations well before you commit to the terms and agreement. That way, refinancing will do your businesses and real estate properties good.

Ivan Widjaya
Refinance noob