Nationwide
Cash-Out Refinance for Real Estate Investors
Unlock Your Property Equity. Put Your Resting Capital Back to Work.
Have equity sitting in an investment property?
A cash-out refinance may allow you to access a portion of that equity without selling the property—giving you capital you can potentially use for your next investment, renovation, or other permitted business purpose.
Keep the property. Access the equity. Put your capital to work.
Your Equity Could Be Working Harder
Real estate investors often have substantial equity tied up in properties that are performing well.
Instead of selling the property to access that equity, a cash-out refinance may allow you to replace your existing financing with a new loan and potentially receive cash from the equity you’ve built.
You may be able to use the proceeds to:
- Purchase another investment property
- Fund renovations or improvements
- Replenish capital used in a previous investment
- Expand your rental portfolio
- Fund another real estate project
- Increase available investment capital
- Pursue new investment opportunities
The objective isn’t simply to take cash out.
It’s to determine whether accessing your equity can help you accomplish your next investment goal.
Who Is Cash-Out Refinancing For?
Cash-out refinancing may be worth exploring if you:
✓ Own an investment property
✓ Have substantial equity
✓ Want to access capital without selling
✓ Are purchasing another investment property
✓ Need capital for renovations
✓ Are growing a rental portfolio
✓ Use the BRRRR strategy
✓ Want to redeploy capital into another investment
✓ Have a specific plan for the proceeds
How Cash-Out Refinancing Works
1. Determine Your Property’s Value
We look at the current value of your investment property and the amount of equity you may have available.
2. Determine Your Existing Debt
Your current mortgage balance and other eligible liens are considered when determining potential proceeds.
3. Determine Your New Loan Amount
The maximum loan amount is generally based on the property’s value and the applicable loan-to-value requirements.
4. Pay Off Your Existing Loan
The new loan proceeds are used to pay off the existing mortgage and other required obligations.
5. Access Your Remaining Equity
After required payoffs and closing costs, eligible proceeds may be available to you as cash.
6. Put Your Capital to Work
You retain ownership of the property and may be able to use the proceeds toward your next investment or another permitted purpose.
Here’s An Example:
Investment Property
Current Property Value: $500,000
Existing Loan Balance: $250,000
Potential New Loan: $350,000
Potential Gross Cash-Out: $100,000
In this hypothetical example, the investor could potentially access approximately $100,000 of gross equity before applicable closing costs and other required deductions.
The investor still owns the property and may continue receiving rental income.
Actual loan amounts, LTV limits, rates, terms, costs, and available cash-out vary by loan program and borrower/property qualifications.
“What Can You Do With the Capital?”
That’s where strategic cash-out refinancing can become powerful.
Consider an investor who has $150,000 of equity available in an investment property.
Rather than leaving all of that capital tied up, the investor may choose to access a portion of it and use the proceeds toward another opportunity. Cash-out refinancing can potentially become part of a larger portfolio-growth strategy.
Cash-Out Refinance for BRRRR Investors
If you use the BRRRR strategy—Buy, Rehab, Rent, Refinance, Repeat—cash-out refinancing may be an important part of your strategy.
An investor may:
- BUY an investment property
- REHAB the property
- RENT the property
- REFINANCE based on the property’s new value
- REPEAT with another investment
The objective is to potentially recover capital invested in the property and redeploy it into another opportunity.
How Much Equity Can You Access?
The amount you may be able to access depends on factors such as:
- Current property value
- Existing loan balance
- Maximum allowable LTV (varies)
- Property type
- Loan program
- Credit profile
- Property cash flow
- Ownership and seasoning requirements
- Existing liens
- Closing costs
- Reserves and other underwriting requirements
The basic calculation:
Property Value × Maximum LTV = Maximum Potential Loan
Then:
Maximum Potential Loan − Existing Loan Payoff − Required Costs = Potential Cash Available
Every transaction is different.
That’s why we evaluate the property, existing financing, and your investment objectives together.
What Types of Properties May Qualify?
Depending on the financing program, cash-out refinancing may be available for various investment properties, including:
Single-Family Rentals
2–4 Unit Properties
Multifamily
Other Residential Investment Properties
Property eligibility varies by program.
What Lenders Consider
Cash-out refinancing is secured by the property, but the lender may evaluate multiple aspects of the transaction.
Property
- Current market value
- Property condition
- Location
- Property type
- Existing liens
- Rental income and/or cash flow
Borrower
- Credit history (depends how hold rental property)
- Financial strength
- Assets and reserves
- Investment experience
- Existing obligations
Cash-Out Refinance vs. Selling
If you need capital, selling isn’t always your only option
| Cash-Out Refinance | Sell the Property |
|---|
| Potentially keep ownership | Give up ownership |
| Access a portion of equity | Access equity through sale |
| Potentially continue rental income | Rental income ends |
| Take on new financing | Pay off existing financing |
| Potentially redeploy capital | Receive sale proceeds |
| Property remains in portfolio | Property leaves portfolio |
Before You Refinance, Know Your Numbers
A cash-out refinance should make financial sense—not simply provide access to cash.
Consider These Items:
New Monthly Payment
Will the property continue to cash flow after refinancing?
New Interest Rate
How does the new rate compare with your existing financing?
Closing Costs
How much will the refinance cost?
Remaining Equity
How much equity will remain in the property after the new loan?
Use of Proceeds
What will you do with the cash?
Return on Capital
Can the new investment potentially generate a return that justifies the additional borrowing?
Long-Term Strategy
Does refinancing support your overall portfolio strategy?
The goal isn’t to maximize debt.
The goal is to maximize the productive use of your capital.
The right strategy depends on your goals, financing terms, taxes, transaction costs, property performance, and overall investment strategy.
Let’s discuss your deal. Call us or reach us on the contact us page. We can find a solution.
All of our loan products are for real estate investors seeking “Commercial Business Loans”. None of our loan offerings are for owner occupants also known as a primary residence. Some but not all of our sources do require a business entity such as a corporation or an LLC to be considered for any type of investment financing.
Disclaimer: Programs offered are subject to change without notice. All borrowers must qualify per program guidelines.