DSCR or Conventional Loan: Refi with cash out
Hinton, WV · Member since 2026 · 12 posts · 4 votes
DSCR or Conventional Loan: Refi with cash out
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Lender · Boynton Beach, FL · Member since 2026 · 214 posts · 88 votes
1dKevin, you are in a great position here — lots of equity, low debt.
For the 4-plex, I would go DSCR, not conventional, for the cash-out refi.
Why:
1. Conventional will cap your cash-out and want full income docs + DTI. DSCR qualifies on the rent, not your personal income.
2. With $350k-$400k value and only $97k loan, you are at ∼25% LTV. You can easily pull $25k to pay debt and still be under 65% LTV, and keep the rate clean.
3. Keep it tax-free — cash-out refi is not taxable income, unlike selling.
For the car wash — don't cross-collateralize it with the 4-plex. That car wash is commercial / special-use. It will need a separate commercial loan or SBA-type loan, and it will slow down your 4-plex refi if you tie them together. Refi the 4-plex alone first, use that cash for the next investment, then refi the car wash separately.
For your family member with the two 4-plexes wanting to sell off-market without a bank — I see this a lot:
1. He wants speed and privacy, no showings, no agent fees
2. He may want to avoid a bank appraisal coming in low
3. He may want seller financing — monthly income without landlord headaches, and spread out capital gains tax
4. Or he just doesn't trust the market and wants a cash buyer he knows
Ask him this: does he want ALL cash now, or does he want monthly income? That answer tells you if he wants a cash buyer or seller finance.
If you want, send me the rents on the 4-plex and I can run a quick DSCR number for you — what you can pull out and what the payment would look like.
33 Replies
- 3dVaibhav PuranikPro MemberMember since 2025 · 112 posts · 59 votes
Here are potential reasons - The four plex doesn't generate enough income to appeal broader market, The four plex is waiting for a lot of CapEx (it has deferred maintenance) or the most benign one - they just wants to get rid of it as easy as possible and they have you in front of them.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes3d
I agree with those reasons especially the income and maintenance. The rents are way below market and he’s had long term tenants. One building needs a new roof as well. Thanks for the reply.
- Realtor · Memphis, Shelby County · Member since 2026 · 317 posts · 112 votes3d
Kevin, with a four-plex it usually comes down to how the lender underwrites you, not just the rate. A conventional refinance can be cheaper if your personal income, credit, and debt-to-income fit, and you can document everything cleanly. A DSCR loan looks mainly at whether the property's rent covers the payment, which can help when your personal income is the limiting factor, but it often comes with a higher rate and fees, so I would compare the total cost and monthly payment side by side, not just the headline rate. Before you pull cash out, be clear on its job: paying off higher-cost debt, keeping a reserve, or funding the next investment. And check with your CPA about how the proceeds are treated. On the off-market family sale, some sellers prefer privacy, speed, and fewer showings — but still use a contract, title, and appraisal or valuation, so both sides are protected.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes3d
I'm definitely leaning towards the conventional route but definitely see the difference with a DSCR loan. I'll compare them both to be sure. The cash out would be exactly for those three reasons you've mentioned and I will consult with my cpa for sure. The off market sale is strategic on their part for sure. The owner is also a real estate attorney so the title and legal paperwork, are always free for me. The rents are way below market so I would immediately raise them to an acceptable market rate that would keep the tenants and be able to pay the debt. Thanks for your reply!
- 2dDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 683 votes
Kevin, a few things worth comparing. A car wash is a special-purpose commercial property, so lenders usually treat it separately from the 4-plex and the loan terms (shorter term, balloon, lower leverage) can differ a lot. With the 4-plex rents well below market, a DSCR loan qualifies off in-place leases or an appraiser's market rent schedule, so how and when you raise rents will affect the loan size. If you don't want to touch a low-rate first mortgage, a second-position HELOC or DSCR HELOC taps equity without refinancing the first, usually at a higher rate. With $97k owed on $350-400k of value you have plenty of equity, so borrow only what you need and make sure rents comfortably cover the payment. Compare total cost (rate, points, appraisal/closing costs, prepayment penalty on DSCR) and, as mentioned, check tax treatment with your CPA.
ProAlpha Capital55 Reviews- Hinton, WV · Member since 2026 · 12 posts · 4 votes2d
Thanks for your reply and input. It helps me get closer to a decision. With both of these properties, the rates are comparable to market. The 4-plex rate is 7% amortized at 15 years with a 5-year balloon due 12/2027. The monthly rent is $3,214 with increases every year, small enough to keep tenants. Monthly expenses, not including debt service, are $920. Market monthly rents for a 2/1 apartment in my area are $1,000-1,200. Located in Northeastern Pennsylvania.
The car wash is 7.75% amortized at 10 years with a 5-year balloon due 12/2029. Same location as 4-plex. I will not be selling either properties.
- 2dErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Hey Kevin,
Happy to connect on the lending side.
LuxePrivate Investments LLC 572 Reviews - Lender · Irvine, Orange County · Member since 2026 · 75 posts · 41 votes2d
With ~$250K+ of equity in that 4-plex, both work — the question is what you're optimizing for.
Conventional cash-out is usually the cheapest money, but it's full-doc: tax returns, DTI, the whole file. If your income and credit are clean, that's the lean I'd follow too.
DSCR cash-out qualifies on the property's rent alone — no personal-income docs, no DTI calculation. The trade is a higher rate, a prepay penalty to watch, and minimums that matter here: DSCR cash-out programs start around a $50K loan, and you can go up to about 75% of value on a cash-out at strong credit. Paying refi closing costs to move $25K of debt is a tough way to spend money.
Honest take for just $25K of debt: a 2nd-position investor HELOC on the 4-plex is probably the cheapest path. No appraisal, draw only the $25K, leave the $97K first alone. Then compare the all-in cost of each option, not just the rate.
The car wash is a different world — that's commercial lending, not my lane. A commercial broker is the right call there.
On the family member selling off-market: usually privacy, avoiding agent fees, or not wanting a bank appraisal and contingencies in the deal. Can't know without asking them, but those are the usual three.
Happy to run your numbers on the 4-plex if you want a second set of eyes — Dan
- Hinton, WV · Member since 2026 · 12 posts · 4 votes2d
Thanks for your reply and input. It helps me get closer to a decision. With both of these properties, the rates are comparable to market. The 4-plex rate is 7% amortized at 15 years with a 5-year balloon due 12/2027. The monthly rent is $3,214 with increases every year, small enough to keep tenants. Monthly expenses, not including debt service, are $920. Market monthly rents for a 2/1 apartment in my area are $1,000-1,200. Located in Northeastern Pennsylvania.
The car wash is 7.75% amortized at 10 years with a 5-year balloon due 12/2029. Same location as 4-plex. I will not be selling either properties.
- 2dJim BlackburnBusiness MemberLender · Florida Based (48 states Puerto Rico) · Member since 2017 · 327 posts · 126 votes
Kevin, a few thoughts from the lending side:
4-plex: You have a lot of equity for a $25K need. A 2–4 unit investment property usually maxes out around 70–75% LTV on a cash-out refi, conventional or DSCR, so you could pull far more than $25K. The real question is what your current $97K loan's rate is. If it's low, refinancing the whole thing to get $25K may cost you more over time than a second-lien option.
Conventional vs. DSCR: Conventional usually prices better, but it qualifies you on tax returns and debt-to-income. DSCR qualifies on the property's rent, so it's often easier if your returns show heavy write-offs. In exchange, expect higher pricing and often a prepayment penalty. Run both.
Car wash: That's commercial property, so residential DSCR and conventional loans won't touch it. Look at a commercial bank or SBA loan."Tax-free": Cash-out proceeds aren't income, but whether the interest is deductible depends on what you spend the money on. Using it to pay off personal debt can make that portion non-deductible. Worth a quick call with your CPA.
Your family member: Selling off market with seller financing can let him spread out his capital gains through an installment sale and earn interest income. He can also skip lender appraisals and repair requirements and close faster. Have an attorney draft the note, and check for a due-on-sale clause if he still has a mortgage.
Happy to run numbers if useful.
Stairway Mortgage, a Division of NEXA Mortgage LLC598 Reviews - Member since 2026 · 28 posts · 6 votes2d
Kevin — with ~$250k+ of equity and only ~$25k of debt to clear, a full cash-out refi of the $97k first is often the expensive way to solve a small need. Worth pricing three paths side by side: (1) conventional cash-out if your personal income/DTI docs are clean, (2) DSCR cash-out if write-offs or DTI are the issue (watch prepay and in-place vs market rents), and (3) a 2nd-position / investor HELOC that leaves a low first alone. The car wash will not fit residential DSCR/conventional. Happy to compare structure once you share the state and the rate/balance on the current 4-plex first.
– Stephen
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Hi Stephen,
Thanks for your reply and input. The 4-plex rate is 7% amortized at 15 years with a 5-year balloon (which I have just been refinancing every 5 years) due 12/2027. The monthly rent is $3,214 with increases every year, small enough to keep tenants. Monthly expenses, not including debt service, are $920. Market monthly rents for a 2/1 apartment in my area are $1,000-1,200. Located in Northeastern Pennsylvania.
The car wash is 7.75% amortized at 10 years with a 5-year balloon due 12/2029. Same location as 4-plex. I will not be selling either properties.
The problem recently is that the rate has been going up every 5 years so the idea of locking a low rate in, hasn’t worked. My current lender won’t go further than 5 years with the car wash.
- Lender · Philadelphia, PA · Member since 2024 · 61 posts · 17 votes2d
Kevin, with that much equity in the 4-plex you have good options for a cash-out refi. We would look first at the in-place rents and the current rate on the $97k loan, since a DSCR cash-out qualifies on rent alone while a conventional cash-out usually prices better if your income and credit are clean. The car wash is a different lane, as commercial lenders underwrite it on its own income and will not fit a residential DSCR loan. We are Royal Partners and we arrange cash-out refinances like this. DM us the 4-plex rents, your current rate, and the market where the property sits and we will give you straight numbers on what a cash-out could look like.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Hi Marc,
Thanks for the reply.
The 4-plex rate is 7% amortized at 15 years with a 5-year balloon (I usually refi every 5 years) due 12/2027. The monthly rent is $3,214 with increases every year, small enough to keep tenants. Monthly expenses, not including debt service, are $920. Market monthly rents for a 2/1 apartment in my area are $1,000-1,200. Located in Northeastern Pennsylvania.
The car wash is 7.75% amortized at 10 years with a 5-year balloon due 12/2029. Same location as 4-plex. I will not be selling either properties.
Thoughts on 1st lien heloc for both? Or will a 2nd lien investor heloc be better on the 4-plex and a cash out refi only on the car wash?
- Lender · Philadelphia, PA · Member since 2024 · 61 posts · 17 votes1d
Hi Kevin, thanks for sharing those numbers. With $3,214 in monthly rent and $920 in expenses before debt service, plus market rents of $1,000 to $1,200 per unit, a second lien investor HELOC on the four plex usually keeps that 7 percent first loan in place and lets you draw only what you need, while a first lien HELOC would reprice the whole balance. For the car wash, a cash out refi on its own income is usually cleaner than tying it to the four plex, since commercial lenders underwrite it separately and the December 2029 balloon gives time to plan. We are Royal Partners and we arrange cash out and HELOC style financing like this. DM us the four plex rent roll, the current payoff on each loan, and the town where both properties sit and we will give you straight numbers on both structures.
- Lender · Boynton Beach, FL · Member since 2026 · 214 posts · 88 votes2d
Kevin, you are in a strong position with that much equity. I would not overthink this one.
For your 4-plex, DSCR will almost always be the better fit than conventional for a cash-out refi. Conventional will cap how much you can pull, ask for full income docs, tax returns, and DTI, and they get picky with investment properties. DSCR just looks at whether the property cash flows. With a $350-400K value and only $97K owed, you have plenty of room to pull out what you need, pay off that $25K debt, and still have cash left for your next investment.
Same for the car wash. DSCR lenders can be more flexible on mixed-use / commercial type properties than a conventional bank. Just make sure you have 12 months of rent / income history clean, because that is what they will underwrite.
I would not use equity from the 4-plex to pay off the car wash. Keep them separate. Pull cash out of each property on its own, use it for debt payoff and your next deal. That way you are not cross-collateralizing and you keep your options open.
On your family member - there are a few reasons a lot of owners sell off-market without a bank:
1. He does not want to list, show the property, or deal with agents and fees.
2. He wants privacy and a quick, clean sale to someone he trusts.
3. He may want seller financing. He gets monthly income without being a landlord, and he can spread out the tax hit instead of taking it all in one year.
4. He may not want to make repairs a bank would require for a buyer to get a loan.
If he is open to seller financing, that could be a great deal for you. Low down, no bank fees, and you already know the property.
If you want, tell me what the 4-plex rents for and I can tell you roughly what a DSCR cash-out would look like for you.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Hi Muyees,
Thanks for the reply.
The 4-plex rate is 7% amortized at 15 years with a 5-year balloon (I usually refi every 5 years) due 12/2027. The monthly rent is $3,214 with increases every year, small enough to keep tenants. Monthly expenses, not including debt service, are $920. Market monthly rents for a 2/1 apartment in my area are $1,000-1,200. Located in Northeastern Pennsylvania.
The car wash is 7.75% amortized at 10 years with a 5-year balloon due 12/2029. Same location as 4-plex. I will not be selling either properties.
I will reach out to him and see if he’s interested in the seller financing direction. Having him spread out the capital gains is a great selling point! I appreciate the advice.
- 2dAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
Kevin, I'd separate the financing decision from the tax decision here.
A cash-out refinance on the 4-plex generally isn't taxable income because you're borrowing rather than selling the property. But I'd be careful about using that borrowed money to pay off debt associated with the car wash. The tax treatment of the interest can depend on how the borrowed funds are actually used.
I'd also look at the car wash sale separately. The taxable result isn't simply the sale price minus the loan balance. The business's adjusted basis, depreciation, and the assets included in the sale can all affect the tax outcome.
If you're planning to sell the car wash and redeploy the proceeds into another investment, I'd run the after-tax numbers before deciding whether to refinance the 4-plex or sell the business.
If your family member is also selling a 4-plex, I'd have them look at the 1031 question before closing if they're planning to reinvest in other qualifying real estate.
Happy to connect!
INVESTOR FRIENDLY CPA®4.9242 Reviews- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Hi Ashish,
Thank you for the reply. Yes, I will need to speak to my cpa as that was something I didn’t think of. I am not selling either property, just wanted to refi and pull some money out for capital improvements and to have a reserve.
- Lender · Franklin, TN · Member since 2026 · 132 posts · 38 votes2d
On the 4-plex you've got a lot of equity with ~97k against 350-400k. Conventional can win on rate if your personal income and DTI fit clean; DSCR ignores W2 and sizes off rents, which helps if you're stacking other debt. Many DSCR cash-outs stop around 75% LTV, so compare both quotes to the same net cash in hand. The car wash is special-purpose commercial — usually its own loan, not something you casually cross-collateralize with a residential DSCR. As for your relative wanting an off-market sale with no bank, that's often speed, deferred maintenance, or rents too low to support a financed buyer's appraisal.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Hi Adam,
Thanks for the reply. I'm leaning the conventional way myself. My w2 income and DTI are clean, so it shouldn't cause any hiccups. I'm going to approach my family member to see if they'd agree to seller financing.
I spoke to a local lender who is willing to go up to $200k with a 7% rate amortized over 15 years max for the 4-plex. They're only willing to do 65% LTV.
- Lender · Irvine, Orange County · Member since 2026 · 75 posts · 41 votes2d
Kevin — thanks for the numbers, they change the shape of this a bit. Two things stand out:
First, the balloon is the real deadline. December 2027 is about 13 months out, and a refinance takes longer than people plan for — appraisal, underwriting, a hiccup or two. Don't wait until 2027 to start the conversation. Get the takeout lined up while you still have a year of runway, not three months.
Second, the rent lift is your biggest lever. You're at $3,214 a month now; at $1,000–1,200 a unit across four units, market is $4,000–4,800. That raise doesn't just add cash flow — it changes the math on every option. On a DSCR loan, the property's rent is what qualifies you, so higher documented rents mean a stronger file. Do the raises first, document them, then refinance into the higher number.
On the structure: the $25K of debt you're trying to clear is small — don't refinance the whole loan just to pay that off. A second-position investor HELOC can clear it without touching the first, and there's no appraisal involved. Then the refinance decision is just about the balloon: conventional is still the cheapest route if your docs are clean, and DSCR is the fallback if the paperwork is the problem, since it qualifies on the rent alone.
Happy to run the numbers once the rents move — just send me the rent roll when it's updated. — Dan
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Thank you!
My docs are clean so I’m leaning towards the conventional when I raise the rents in the spring. I’m liking the idea of the second position investor heloc. Are these products widespread throughout the banking industry?
- Member since 2026 · 3 posts · 1 vote1d
Kevin, the car wash side is right in my wheelhouse, so a few thoughts:
The 12/2029 balloon is a bigger issue than the rate. I'd try to get the wash onto a longer, fully amortizing term so you're not forced to refi in whatever rate environment exists then.
On a $30K balance, an SBA loan is usually overkill. The fees and paperwork don't make sense at that size. A local community bank or credit union that already knows your business is often the easiest path.
If you ever buy a bigger wash or expand, that's where SBA 7(a) shines: up to 25-year amortization on the real estate, no balloon, and a lower down payment than conventional, on loans up to $5MM.
For context, I'm an SBA 7(a) lender in Tampa Bay and have closed over $100M in SBA loans. Happy to help if the car wash side gets more complicated.
- Hinton, WV · Member since 2026 · 12 posts · 4 votes1d
Thank you Dan!
Yeah my lender kept the car wash loan at 5 years since 2019 when I bought it. Refinanced twice already and the rate wasn’t favorable each subsequent time. Now it’s at 7.75% so a lower and longer term would be ideal. It’s a small 3 bay car wash, so stretching it would help. I will have to call around to the local banks to see who would have a longer term. Problem is, I don’t wrap my quarters and most don’t take bulk. My current bank takes $500 bags that I weigh so that is one of the reasons I stayed. If I get away from the quarters, I’d be set because I’m not about to roll them! Haha
- 1dRyan BakerBusiness MemberLender · Strongsville / Cleveland, OH · Member since 2026 · 134 posts · 34 votes
Hey Kevin — I'd underwrite the four-plex and car wash separately. For the apartment refi, compare conventional and DSCR on total closing costs, payment, and prepayment terms, and ask how the lender treats below-market leases versus market rents. Since you only need a modest amount for debt payoff, include the cost of refinancing the whole first loan in that comparison.
Happy to talk through the options — give me a call (my number is in my signature below).
– Ryan
Quote from @Kevin Pugliese:
I have a 4-plex apt bldg with a market value between $350-400k and a loan of $97k. I was looking to do a cash out refi to pay off some debt (less than $25k). I also own a 3 bay SS car wash with an MV around $75-100k and a loan of $30k. I am also looking at doing the same with the car wash. I’ve tossed around the idea of using equity in apt bldg to pay off car wash but I think I’d rather pull tax free money from that and use it for the next investment. I also have a family member with two 4-plexes and is interested in selling but off market without a bank. Why would he want to do that? I have my thoughts but just wanted to see yours. Thanks!
You have a couple of interesting opportunities here, and with the equity you've built in both properties, I would look at the financing strategy carefully before deciding to refinance.
Regarding the fourplex, with an estimated market value of $350K–$400K and only $97K owed, you appear to have substantial equity available. A DSCR cash-out refinance may be an option, depending on the property's rental income, current cash flow, and the loan program requirements.
However, before refinancing, I would look at whether a second-lien option might make more sense. This could allow you to access some of the equity without disturbing your existing first mortgage, particularly if you have a favorable interest rate.
The same analysis applies to the car wash. Commercial financing options may be available depending on the property's value, business operations, income, and existing debt.
One thing I would consider: If your objective is to access capital for your next investment, I would avoid unnecessarily tying up all your available equity paying off relatively small debts without first comparing the long-term cost of each financing option.
As for your family member wanting to sell the two fourplexes off-market without involving a bank, there are several possible reasons:
They may be interested in seller financing.
They may want to avoid the delays and complications of traditional bank financing.
They may prefer a private transaction with flexible terms.
They may be looking for a quicker sale or a structured payment arrangement.
There may be tax-planning considerations or other personal reasons behind the decision.
I would definitely explore whether seller financing is an option. Depending on the terms, it could create an opportunity for you to acquire additional rental properties without immediately going through conventional bank financing.At JCREIG Capital Funding, we specialize in financing real estate investors, including DSCR loans, cash-out refinances, commercial financing, and other investor-focused lending solutions.
I'd be happy to review the numbers on both properties, explore your cash-out options, and see how we can structure the financing to help you preserve capital for your next investment.
Sometimes it's not about how much equity you can pull out, but how strategically you put that equity to work.
Feel free to reach out. Happy to run some preliminary numbers.
- Lender · Boynton Beach, FL · Member since 2026 · 214 posts · 88 votes1d
Kevin, you are in a great position here — lots of equity, low debt.
For the 4-plex, I would go DSCR, not conventional, for the cash-out refi.
Why:
1. Conventional will cap your cash-out and want full income docs + DTI. DSCR qualifies on the rent, not your personal income.
2. With $350k-$400k value and only $97k loan, you are at ∼25% LTV. You can easily pull $25k to pay debt and still be under 65% LTV, and keep the rate clean.
3. Keep it tax-free — cash-out refi is not taxable income, unlike selling.
For the car wash — don't cross-collateralize it with the 4-plex. That car wash is commercial / special-use. It will need a separate commercial loan or SBA-type loan, and it will slow down your 4-plex refi if you tie them together. Refi the 4-plex alone first, use that cash for the next investment, then refi the car wash separately.
For your family member with the two 4-plexes wanting to sell off-market without a bank — I see this a lot:
1. He wants speed and privacy, no showings, no agent fees
2. He may want to avoid a bank appraisal coming in low
3. He may want seller financing — monthly income without landlord headaches, and spread out capital gains tax
4. Or he just doesn't trust the market and wants a cash buyer he knows
Ask him this: does he want ALL cash now, or does he want monthly income? That answer tells you if he wants a cash buyer or seller finance.
If you want, send me the rents on the 4-plex and I can run a quick DSCR number for you — what you can pull out and what the payment would look like.
- 1dDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 683 votes
Thanks for the added context, Kevin. With 5-year balloons due in 2027 and 2029, I’d plan extension and refinance options well ahead of each maturity. For the 4-plex, I’d size from current leases and verified expenses, including roof reserves, and treat market-rent upside as a scenario rather than the base case. Keep the car wash’s financing analysis separate, and compare total cost, maturity risk, and cash-flow impact before choosing either route.
ProAlpha Capital55 Reviews - Lender · U.S. · Member since 2026 · 3 posts · 1 vote22h
You may have a couple of opportunities here worth exploring separately.
On the 4-plex, I would look at both a conventional investment-property cash-out refinance and a DSCR loan. With an estimated value of $350K–$400K and only $97K owed, you appear to have substantial equity. The better option will depend on the rental income, existing loan terms, credit profile, and how much cash you ultimately want to access.
The car wash is a different conversation. I would look at commercial financing options and determine whether the property, business income, or a combination of both can support a cash-out refinance. With a $30K existing loan and an estimated value of $75K–$100K, the available equity and lender requirements will determine whether refinancing makes economic sense.
Regarding your family member selling two 4-plexes off-market, there are several possible reasons. They may prefer avoiding listing commissions, want privacy, desire a faster transaction, or be interested in seller financing. Seller financing can also provide an income stream and potentially allow the seller to spread recognition of capital gains over time, depending on the structure and tax circumstances.
One question I would ask is whether your family member is open to carrying the financing. That could create an opportunity for both parties.
My suggestion would be to evaluate each property independently before deciding how to leverage the equity. The goal should be to access capital while keeping the existing investments financially productive.
Roberto
EquityNest Capital
512-576-6348
- Lender · Irvine, Orange County · Member since 2026 · 75 posts · 41 votes22h
Good question — yes, they're a real product, but most big banks won't do them on rentals, which is why people think they don't exist. Investor-focused lenders do.
The one I work with sits in 2nd position behind your 7% first, no appraisal, qualifies on bank-statement income, fixed rate, interest-only option. That's exactly your situation — pull the $25K without touching the first or waking up the balloon.
Qualification is a soft credit check, about 3 minutes: DTI cap is 45–50%, and debts can be paid off to qualify, so the $25K itself isn't the problem. If the numbers work, it's a clean way to clear the small debts and buy yourself runway to lift rents before the December 2027 balloon.
Happy to run your numbers on it if you want — Dan
- Pakistan · Member since 2026 · 1 post · 1 vote22h
Kevin, I would run the payment math before deciding on a full refi. On a $200k loan at 7% amortized over 15 years, principal and interest alone is about $1,800 a month. That is more than double the roughly $870 a month you are paying now on the $97k loan, so you would be paying about $930 more every month for years, plus closing costs, to pull out roughly $100k after paying off the current loan.
If the amount you actually need is much smaller, that trade rarely makes sense. A small HELOC in second position would let you borrow only what you need, leave the $97k first mortgage alone, and keep your monthly cost much lower while you decide on the bigger plan. It also keeps your options open with the balloon coming up in December 2027.
In short, compare the refi on total cost and monthly payment, not just on how much cash you can pull out. For a smaller need, the HELOC is usually the cheaper, more flexible route.
Hi Kevin — I can price the 4-plex properly with a few things that aren't in the thread yet: your credit score range, how much you're looking to pull out in total, the annual taxes and insurance on the 4-plex, whether the current loan has a prepayment penalty, and whether you hold it personally or in an LLC. And if you want the car wash looked at too, its monthly income. Send what you have and I'll run real numbers — no hard pull. — Jiao Liu, Eirvale Financial Services
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