Investor Profile

• Property type: Single-family rental
• Ownership: 3 properties
• Experience: 10+ years
• Strategy: Long-term portfolio stability

Property Snapshot (Before Refinance)

• Estimated property value: $450,000
• Current loan balance: $225,000
• Loan-to-Value (LTV): 50%
• Equity: $225,000

Current Loan Terms

• Interest rate: 7.35%
• Loan type: Investor ARM
• Monthly principal & interest: $1,550

Rental Performance

• Gross monthly rent: $3,400
• Operating expenses: $900
• Net operating income (NOI): $2,500

Cash Flow (Before Refinance)

• $2,500 − $1,550 = $950 per month
• Rent coverage ratio: 1.61x

Refinance Scenario

• New loan amount: $225,000
• New interest rate: 6.10%
• Loan type: Long-term rental loan
• Monthly principal & interest: $1,366

Cash Flow (After Refinance)

• $2,500 − $1,366 = $1,134 per month

Improvement

• Monthly increase: +$184
• Annual increase: +$2,208

Why This Refinance Made Sense

• Reduced interest rate without increasing leverage
• Strong existing cash flow supported better pricing
• Long hold horizon justified refinance costs

Key Takeaway

Even properties with “decent” rates can benefit from refinancing when leverage is low and cash flow is strong. Optimization is not only for high-rate loans.