Rate Locked Investors

Investor · Nassau County, NY · Member since 2022 · 81 posts · 19 votes

I see alot of people who purchased around early 2020's who want to access cash from their investments but cant refinance without messing up their cashflow. Is anyone here running into similar issue?

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Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes

Many are. Not a ton of options to tap. I see 1031 exchanges more common.

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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
1d
Many are. Not a ton of options to tap. I see 1031 exchanges more common.
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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
1d
@Tyler Mcclean - Good question! Investors always have the option of opening up a RELOC, rental line of credit or an equity loan to access the equity beyond the first position. I've done that on primary residence, investment properties, and commercial properties. Typically for owner occupants, you can get a HELOC or equity loan up to 100%. For investment property, they typically go as high as 75%. Solid tactic to tap unutilized equity to scale your portfolio while keeping good debt terms in place.
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Jose Ramirez
Investor · Beach park IL · Member since 2022 · 17 posts · 9 votes
1d
Yes I’m at in IL and trying to do a cash out of one of my rental and new loan payment is the same as the rental payment and I be not making no cash flow unless I increase the rent payment
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- Tyler MccleanPro Member
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  Investor · Nassau County, NY · Member since 2022 · 81 posts · 19 votes
  1d
  Have you considered other options? Like taking a second as a line of credit? What are they doing for you on the rate?
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- Jose Ramirez
  Investor · Beach park IL · Member since 2022 · 17 posts · 9 votes
  1d
  Dscr loan 7.5 %
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- Tyler MccleanPro Member
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  Investor · Nassau County, NY · Member since 2022 · 81 posts · 19 votes
  1d
  I just messaged you
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Divin KanyamaBusiness Member
Accountant · Seattle, WA · Member since 2025 · 168 posts · 46 votes
1d
@Tyler Mcclean , This is a common issue for investors who bought or refinanced when rates were historically low. The property may have substantial equity, but replacing a 3%–4% loan with today’s financing can reduce—or completely eliminate—the cash flow.
Before refinancing the entire property, I would compare alternatives such as a HELOC, second-position loan, partial sale, or borrowing against another asset. Each option has different costs and risks, so the key is determining whether the cash will produce a return that justifies the added debt. Sometimes protecting strong cash flow is more valuable than accessing equity simply because it is available.
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Matthew Tregoning
Real Estate Consultant · Melbourne, FL · Member since 2019 · 205 posts · 111 votes
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What would the cash be used for? That’s the part I’d want to know before getting too attached to a way of pulling it out. Having equity available and having a good reason to borrow against it are separate things.
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
23h
They might be stuck that way for a bit unless they gradually increase rent over time and don't pull the full cash out. They underwrote their deal with sub 5% rate and it will be pretty rare to see these rates again.
It might be a good reason why CA real estate is messed up. People with sub 5% rates are holding a bit tighter to keep the lower payment and in some instances it makes more sense to rent a home rather than to buy as long as you put the difference in an S&P.
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Igor Ganapolsky
Englewood, NJ · Member since 2018 · 461 posts · 74 votes
23h
tyler this is super common right now. i buy exclusively at tax deed auctions with cash so i don't have the rate lock problem myself, but i see a lot of investors in your exact situation down here in florida.

matthew asked the right question above - what's the cash for? because that's really the whole decision. if you've got a 3.5% loan and you refi at 7.5% to pull out equity, that cash needs to earn you more than 7.5% somewhere else just to break even on the swap. and that's a pretty high hurdle.

if the answer is "i just want to access my equity" with no specific deal in mind, honestly just leave it alone. paper equity doesn't pay bills but neither does a new loan payment that eats your cashflow. i'd rather have a property sitting there making $300/month with a 3.5% payment than refi it and break even or go negative just to have cash sitting in my account.

if the answer is "i've got a specific deal that returns 12%+" then maybe the math works. but be honest with yourself about whether that deal is actually lined up or if you're just feeling impatient.

the other option nobody's mentioning here is patience. rates do come down. we saw it happen in 2023-2024 when everyone thought rates were going to 10% forever. if you've got a good property with a good low rate and positive cashflow, you're already winning. you don't need to fix something that isn't broken just because you see equity sitting there.

my whole approach is basically the opposite of what you're dealing with - i buy distressed properties at auction for cash, fix them up, and either rent or sell. no loans, no rate risk, no refinancing headaches. the tradeoff is i need more cash upfront and i can't scale as fast as someone using leverage. but i sleep better at night knowing exactly what my numbers are without worrying about what the fed does next.

for your situation - if the property cashflows and the rate is good, just be patient. the equity isn't going anywhere and neither are the opportunities.
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