March 9, 2026 | 2.5 Minute Read
This past Friday, we completed a refinance of 16 properties that were previously spread across three different portfolios with multiple lenders, consolidating them into one loan.
The original loans were 5/1 ARMs at 4.5%, scheduled to reset in early 2027. Our new interest rate is 6.375%, which is nearly 2% higher.
At first glance that might seem like a negative move—but in reality, the refinance has very little impact on our cash flow and actually strengthens our position moving forward.
Let me explain.
Where We Were in 2022
When we refinanced these portfolios in early 2022, the numbers looked like this:
Monthly PITI: $5,810.77
Average rent per property: $900
Total monthly rent: $14,400
Annual taxes: ~$16,000
Annual insurance: ~$16,000
At the 4.5% rate, this portfolio produced $3,402.09 in monthly cash flow with a DSCR of 1.39.
Where We Are Today
Over the past four years, rents have increased significantly.
Today the numbers look like this:
Average rent per property: $1,261
Total monthly rent: $20,713
Annual taxes: $19,344
Annual insurance: $21,035
Even with the new 6.375% interest rate, our PITI payment is $13,940.63, leaving us with $6,772.37 in monthly cash flow and a DSCR of 1.64.
That represents roughly a 50% increase in net income, even with the higher interest rate.
This alone made the refinance worthwhile.
Paying Off Debt
Our tax free cash out was $220,000. We will use the funds to:
- Pay off exiting credit card debt and outstanding vendor invoices
- Keep the remaining in reserves for capital reinvestment into existing projects
Free & Clear Properties
As part of the refinance, we were able to pay off three additional properties from one of the loans.
If these properties had been part of the loan, they would have added $2,613.86 to our monthly payment.
Two of these properties are short-term rentals and are among our top-performing assets. In 2025, they generated a combined $82,327.97 in gross revenue, or about $6,860 per month, with approximately $4,000 in monthly net income.
The third property is a long-term rental that brings in $1,280 per month.
Taxes: $101 per month
Insurance: $110 per month
That leaves $1,069 in monthly net income, assuming no maintenance costs. The property was fully renovated, and in the four years this tenant has lived there, we have received only four maintenance requests.
Together, these three debt-free properties should generate about $5,000 per month in net income.
Strengthening Bank Relationships
Another important benefit of this refinance is that we paid off loans with several local banks, strengthening our relationships with them.
That’s intentional.
Within the next week, we plan to return to those same banks to secure lines of credit using the three free-and-clear properties as collateral. Those properties have an estimated value of $470,000, which should allow us to leverage up to $2 million in credit.
Fueling Future Growth
These lines of credit will allow us to:
Purchase additional houses with cash (instead of hard money)
Reinvest capital into our existing rental inventory
Begin financing several development projects
Our immediate development plans include:
Two fourplexes for our short-term rental portfolio
Several build-to-rent houses on vacant lots we already own
The Bigger Vision
All of these moves are part of a much larger plan.
Our long-term goal is to finance two major developments in 2027:
A 75-unit build-to-rent townhome community
A 40-unit garden home development
I’ll go into more detail about those projects in a future post.
At first glance, refinancing into a higher interest rate might seem counterintuitive. But when you look beyond the rate and focus on cash flow, equity positioning, and strategic leverage, the move makes complete sense.
By consolidating loans, freeing up high-performing properties, and positioning ourselves for new lines of credit, this refinance sets the foundation for significant expansion of our rental portfolio over the next several years.