Estimate the cash you can pull from an investment property, the new loan amount, and the new monthly payment.
A cash-out refinancereplaces your current mortgage with a larger one and gives you the difference in cash. On an investment property it’s how investors pull out equity to buy the next rental, fund a rehab, or recycle their capital — the “R” in the BRRRR strategy.
Lenders cap a cash-out refinance at a maximum loan-to-value — for investment properties that’s commonly around 75%. Your cash out is the new loan minus what you still owe and your closing costs:
Cash Out = (Value × Max LTV) − Balance − Closing Costs
Worked example:a $400,000 property with a $220,000 balance at 75% LTV supports a $300,000 new loan. That’s $80,000 gross, and after ~$6,000 in closing costs about $74,000in your pocket — with a new payment near $2,050/month at 7.25% over 30 years. Adjust the inputs above for your property.
It turns trapped equity into a down payment on the next property without selling, and the cash is not taxed as income (it’s a loan). The trade-off is a larger loan and a higher payment, so confirm the property still cash-flows afterward — check it with the Rental Cash Flow Calculator and make sure it still passes DSCR.
A cash-out refinance replaces your loan with a new fixed one; a HELOC adds a revolving line on top of your existing mortgage; a bridge loan is short-term financing to move between properties. When the numbers work, get matched with investor-friendly lenders who do investment-property cash-out refinances.
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Get MatchedA cash-out refinance replaces your current mortgage with a larger one and gives you the difference in cash. Investors use it to pull equity out of a rental to buy the next property, fund a rehab, or recycle capital — without selling.
Your cash out is the new loan (capped at the lender's max LTV) minus your current balance and closing costs. For example, a $400,000 property with a $220,000 balance at 75% LTV supports a $300,000 loan — about $80,000 gross, or roughly $74,000 after $6,000 in closing costs.
Lenders commonly cap investment-property cash-out refinances around 75% loan-to-value (sometimes lower for 2-4 units), versus higher limits on a primary residence. The exact cap depends on the lender, property type, and your credit.
No. Cash-out proceeds are loan funds, not income, so they are not taxed when you receive them. (This is general information, not tax advice — confirm with a tax professional.)
A cash-out refinance replaces your mortgage with a new, larger fixed loan; a HELOC adds a revolving line of credit on top of your existing mortgage. A refinance resets your rate and term, while a HELOC leaves your first mortgage in place.
Model the full Buy, Rehab, Rent, Refinance, Repeat cycle. Estimate your cash-out refinance proceeds, equity captured, and cash-on-cash return after executing the BRRRR strategy on a value-add deal.
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