How to Effectively Cash-Out Refinance a Rental Property
5 minute read
May 9, 2022


Home values have risen significantly in the past few years, meaning more equity is stored up in properties.

Homeowners have flocked to their traditional lenders in droves to tap into this equity with a cash-out refinance.

But what about tapping into this equity in a rental property?

If you’re an investor with one or more properties, you may want to use cash-out refinance for your rental properties — and use the cash for more investments.

We’ll show you when, why, and how you should cash out on your rental property with a hard money loan to keep your portfolio growing.

What is a cash-out refinance?

At the start of 2022, the average mortgage holder had $178,000 in tappable equity, which is the difference between a property’s value and its mortgage balance.

One way to tap into this equity is with a cash-out refinance.

Marquee Funding Group can do cash-out refinance loans in 1st, 2nd, 3rd, or even 4th position.

A cash-out refinance consists of taking out a new loan for more than what you currently owe, paying off the former loan balance, and taking the difference in cash to use in whatever ways best benefit your investments.

While a cash-out refi is a popular option for homeowners to use on their primary residences, investors can also get one for their rental properties.

What’s your loan scenario?

Why would you cash-out refinance your rental property?

If you cash-out refinance your rental property, you receive the difference between loans as a lump sum of cash.

This cash can be used for the following purposes:

  • Expand your investments
  • Put a down payment on another property
  • Pay for repairs or improvements on your current property
  • Pay down debts

The amount you can cash out depends on your property’s current value and the existing loan balance.

Traditionally, the lending requirements for refinancing a rental property are stricter. However, this is only true for investors who try to refinance with a bank or other traditional institution.

Experienced investors have a hard money lending partner to help them quickly refinance with minimal requirements and cash in a matter of days.

When should you cash-out refinance a rental property?

Timing is more crucial for an investor when using a traditional lender to cash out on a property.

That’s because traditional lenders, such as banks, have much stricter requirements on the amount of equity in the property, loan-to-value, how long you’ve had the current loan, and more.

Additionally, borrowers are scrutinized for their credit score, income requirements, and number of loans and properties.

All of that aside, the best time to cash out on your property is when it works for your unique investment goals. Currently, there are still collectively high amounts of equity to tap into as home values remain high.

Mortgage rates are still considered historically favorable, despite how they’ve risen in recent months.

If you’re considering a cash-out refinance for your rental property, connect with a hard money lender for a down-to-earth, no-nonsense look at your situation and what it would take to reach your goals.

Marquee’s hard money lenders can provide up to 70% combined loan-to-value (CLTV) on any singular property or combination of properties in 1st, 2nd, 3rd, and even 4th positions.

Is it difficult to qualify for a cash-out refinance?

It’s generally difficult to cash-out refinance a rental property with a bank or other traditional lender. These lenders will have investors jump through hoops to prove they can make the deal worth a lender’s time.

That’s just the nature of how they operate — they have requirements to meet and risks to weigh.

A hard money lender also has requirements to meet and risks to weigh, but they are able to take a far more flexible approach and offer more options. Instead of strict lending requirements, they’ll want to know an investor’s cash-out plan and exit strategy.

Cashing out equity is among the most popular and effective ways to profit from an investment property, and to then use these profits to continue to expand and build on your efforts.

A hard money lender understands the unique goals and challenges of an investor, and aims to fulfill a need in the industry for the types of fast, flexible financing options these borrowers need.

Cash-out refinance your rental property with Marquee 

With hard money loans, private investors fund deals based on the value of your assets, rather than requirements set by the federal government.

That’s why hard money lenders don’t require the same strict qualifications as institutional lenders, and can set more flexible loan agreements.

Marquee Funding Group is an experienced team of savvy real estate investors and loan originators. 

We understand the urgency investors have to move forward with deals, which is why we move quickly to help you reach your investment goals.

Marquee Funding Group’s benefits include:

  • Funding in as little as seven days
  • Immediate review of your loan scenarios
  • Fast application process, document request, and underwriting

In addition to cash-out refinance, we also offer rate-and-term refinance options, and the following loan options:

  • Single-family, multi-family, commercial, industrial, and land loans
  • Owner-occupied and non-owner-occupied consumer or business purpose
  • Construction, ground up, fix-and-flip, or fix-and-occupy loans

By focusing on the merits of the deal, rather than your credit score or certain property restrictions, approvals are fast and simple. 

Although interest rates are higher, term lengths are shorter and you can refinance to another loan type.

To get started with a cash-out refinance on your rental property, submit your loan scenario to our team today.

We look forward to building a relationship with you for many refinance opportunities to come.

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