Yes — you can refinance an apartment building and pull cash out, as long as the building has equity and its income comfortably covers the new payment. Like every other multifamily loan, a cash-out refinance qualifies on the building’s income, not yours — which is exactly what makes it such a powerful tool for scaling a portfolio.
How much you can pull out
Two limits set your cash-out, and the tighter one wins:
- Loan-to-value. Cash-out refinances are usually capped a little lower than a purchase — often around 70%–75% of the building’s value. The equity above that stays in the building.
- DSCR. The new, larger loan has a larger payment, and the building’s NOI still has to cover it at the required ratio. If pulling more cash pushes the payment past what the income supports, that caps the cash-out.
Between value and income, whichever runs out first sets the number.
Why investors do it
The cash-out refinance is how a lot of multifamily portfolios actually grow. Instead of selling a building to access its equity — and triggering the tax and transaction costs that come with a sale — you refinance, pull equity out, and use it as the down payment on the next building. You keep the asset and its income, and you redeploy the equity. Done repeatedly, it’s the engine behind a growing portfolio.
Raising NOI raises your cash-out
Because a commercial building’s value is tied to its NOI, improving the income does double duty on a refinance: a higher NOI lifts the appraised value (more room under the LTV cap) and strengthens the DSCR (more room under the income test). This is why the value-add play so often ends in a cash-out refinance — you raise rents, the building is worth more and covers more, and the refinance returns your capital.
A typical deal
A scenario I see often: an investor who bought an under-rented building two years ago, raised rents to market, and lifted the NOI substantially. We refinance at the higher value, pull a chunk of equity out tax-deferred, and confirm the new payment still clears the DSCR. That equity becomes the down payment on the next building — no sale required.
Ready to pull equity out?
If your building has grown in value or income, a cash-out refinance may free up capital for the next deal. Tell us about your deal and we’ll run the numbers — in English or Spanish.
By Andres Jara — Alpha Equity Lending (NMLS #1855083). 20+ years in real estate finance, an MS in Finance, and an active South Florida investor and landlord.
