Cash-Out Refi Strategy for a Fourplex

[Rob Tara]

Hello BP community. 

I’m looking for advice from investors with more experience on whether a cash-out refinance makes sense in my situation.

Property Details

• Type: Fourplex
• Purchased: May 2024
• Current Loan Rate: 6.65% (3/1 ARM)
• Current Equity: ~14%
• Capital Improvements: Invested $120,000 renovating all four units + exterior
• Status: Rents are fully stabilized and the asset is now cash-flow positive

Objective:

I want to acquire another investment property, but I’m short on cash for the down payment and closing costs. My plan is to refinance and tap into the equity I’ve created.

Key Questions for the Community

1. Is a cash-out refi even feasible with only ~14% equity?
   Most lenders I’ve spoken to seem to require at least 25–30% equity (post-refi) on small multifamily. Curious if anyone has pulled off a cash-out at a similar equity position.
2. Given that rates have only gone down marginally, is there any strategic advantage in refinancing now?
   My fear is: I refinance, get a slightly better rate, but barely extract cash—and I restart the amortization clock.
3. Is there a smarter way to unlock capital?

Appreciate any insight from investors who have negotiated similar situations  

[Juan Yepes]

@Rob Tara you'll need to find an unconventional loan product that would allow you to tap into your equity considering you are above 80% LTV. This is typically where banks won't be interested but mortgage brokers can find non-institutional lenders that take more risks than the banks are willing to. Feel free to reach out if you'd like to explore further.