Cash-Out Refinance on an Investment Property

A cash-out refinance replaces your current loan with a larger one and gives you the difference in cash, turning built-up equity into capital you can redeploy. On an investment property, it is one of the most powerful tools for scaling.

How does it work on a rental?

If your property is worth more than you owe, a new loan pays off the old balance and returns the extra equity as cash. With a DSCR cash-out refinance, the new loan qualifies on the property's rent, so you can pull equity without your personal income limiting you.

When investors use it

• The final leg of a BRRRR deal, recovering your original capital.
• Pulling equity from a stabilized rental to fund the next purchase.
• Replacing a short-term bridge loan with long-term debt and taking cash out at the same time.

What you can pull

The amount depends on the property's value, the loan-to-value limit, and, for DSCR, whether the rent supports the new payment. A higher value and stronger rent let you pull more.