Need access to cash?

Question

I've been talking to quite a few investors lately who have equity tied up in their properties but need access to cash for one reason or another.

Just wanted to throw this out there because I don't think everyone realizes the different options available.

You can do a cash out refinance BUT if you've got a great rate on your first mortgage and don't want to touch it, you can also look at a HELOC or a 2nd mortgage... even on investment properties.

I actually just went through a refinance on one of my own properties so I've been on both sides of this. Obviously every situation is different and it really comes down to the numbers, but sometimes accessing the equity you already have makes more sense than selling a property or tying up other cash.

Curious if anyone else is running into this lately? Are you pulling equity for your next deal or just trying to free up some cash?

Stacy Raskin · Answer

If doing a HELOC along with a lower rate first position mortgage, it's worth checking the combined rate of the first mortgage and the HELOC with a blended rate calculator as sometimes the overall rate for both the older lower rate first position mortgage and the new HELOC will be higher than people expect. If so, it might make sense to do a normal cash out refinance if the overall rate with be lower and if it makes sense for the borrower's goals. It also depends on how long the loans will be held for, especially the HELOC, as it's usually a higher interest rate compared to a first position 30 year mortgage.

Also, generally a HELOC unlike a DSCR loan is a debt to income (DTI) which means the mortgage will be structured based on borrower's personal income and debt to income ratios. A DSCR loan which will be based on the actual or projected property rents.

Joseph Scorese · Answer

Amber, great points! I'm seeing similar conversations with investors looking to unlock equity to fund their next acquisition or improve liquidity.

My biggest concern heading into 2027 is potential property value compression and its impact on DSCR financing.

As property values soften in certain markets, investors could face reduced equity positions, lower cash-out proceeds, and tighter loan-to-value ratios. Combine that with rising property taxes, insurance costs, and operating expenses, and DSCR qualification becomes even more challenging.

Equity on paper doesn't always translate into accessible capital.

As a nationwide direct private lender, I encourage investors to stress-test valuations, rental income, debt service, and exit strategies before leveraging additional equity.

The real question isn't just how much equity you can access, but whether the property's cash flow can comfortably support the additional debt.

Joseph V. ScoreseNationwide Direct Private Lender | Built Lending

Amber Stout · Answer

Great points and I do agree. I've seen it on my own property that I had to do a refinance for - the value has gone down and therefore less access to equity. There are creative ways to reduce the DSCR such as interest only or 40 year term - it definitely depends on the deal and strategy, but there are creative ways to make it happen if needed.

Amber Stout · Answer

Oh, wow, that's very cool! How does that work? and have you used that particular loan product yourself?

David Krulac · Answer

We've done Helocs and second mortgages so as not to disturb low interest rate first mortgages. We've also gotten lines of credit, both with and without collateral. Local credit union has a "Signature Loan" with no collateral required, very cool!

Amber Stout · Answer

I can see that starting to play out as well with a couple of my investor clients who are looking to do cash outs to help with liquidity.

Chris Seveney · Answer

We are seeing a lot of people getting in trouble on one property while trying to refinance or pull money out of an existing property they have. The debt stacking they're providing just digs themselves into a deeper hole instead of biting the bullet and accepting a loss on a specific property. They'll overleverage another property to try and save another and end up losing additional property because most are too optimistic in the outcomes and expectations. They do not realize most things take a lot longer and cost a lot more than originally anticipated.

Gregory Vassilatos · Answer

@Greg Kasmer, investment-property HELOCs are out there, mostly at community banks, credit unions, and a handful of investor-focused lenders. Combined LTV is usually lower than on a primary, and it matters whether the property is in Philadelphia County or the suburbs, and whether it's a single-family or a 2–4 unit, since some programs only do one unit.

Which property would the HELOC be on: city and county, and is it 1 unit, 2–4, or more? About what is it worth, and what do you owe on the first? I'm a PA investor and do investor financing here, so I'm happy to run a free scenario review once I have those details.

Greg Kasmer · Answer

@Amber Stout - I'm always looking for those that can do a HELOC on an investment property. Do you know of any lenders?

Amber Stout · Answer

Hi @Greg Kasmer - I do have access to a couple of lending partners that will do a HELOC on an investment property. Happy to help/answer any questions you may have.

Need access to cash?

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