"Free refi vs. Cash-out refinance Help!

[Kristofer Danaher]

Hey there! last year I purchased my first deal. It's an over under duplex. Both units are 3 br 1 bath. I would really like to put a second deal in the books this year. purchase price was $430k. Both of the units were very out dated and rents were low. I renovated both units including paint and new flooring throughout and kitchen in both units. New bath in one of the units. I was able to increase rent $500 a month. I had a market analysis done and the property came back at $530-550k. I owe $390k. I get a "free refi" through the bank I financed with. The problem is they will only loan 80% of equity which doesn't leave me any funds to roll into my next deal. I have been seeing some banks will loan up to 90% equity. My current rate is 7.1%. id like to get that rate down and borrow as much as possible fore my next deal. can anyone recommend an investor friendly lender?  Are there any other free or cheap options to accomplish this or should I use my free refi and do a separate heloc with another bank? any information is helpful, thanks! 

[Pierre Guirguis]

If the property is worth 530–550k and you owe 390k, at 80% LTV you're looking at a max loan of roughly 424k–440k depending on appraised value. That doesn't leave much room after payoff and costs.

When you're hearing "90% of equity," that's often misunderstood. Most lenders cap at a percentage of value, not equity. On 1–4 unit investment properties, 75–80% LTV is much more common than 90% LTV, especially in today's rate environment.

Before jumping into a refi, I’d ask:

- Is the goal lower rate, or pulling capital for the next deal?
- Does the new payment still support cash flow at higher leverage?
- How long do you plan to hold this property?

A HELOC layered behind your first mortgage can sometimes be cleaner than refinancing the entire loan, especially if your current rate is competitive. But second-position lenders will look closely at combined LTV and cash flow.

There’s no free money here, just tradeoffs between rate, leverage, and flexibility.

Happy to look at specific numbers to see how it could be structured.