Refi Equity Distribution Calculator

Cash-out refis distribute equity. This calculator sizes net distribution and capital status.

New loan proceeds

Old loan payoff

Refi closing costs

Reserves retained

LP equity invested

Net distribution

$6,650,000

Capital returned %

83.13%

LP capital remaining

$1,350,000

How the math works

Net distribution = new loan − old payoff − closing − reserves.

Distribute refi proceeds only after confirming debt service coverage on the new loan under stress. A cash-out refi that leaves DSCR at 1.15x in base case but 0.95x in stress case is dangerous — the distribution feels like a return of capital but is really leverage extraction that can force a later call.

How to Use

Enter new loan proceeds.
Enter old loan payoff.
Enter refi closing costs.
Enter reserves retained.
Enter LP equity invested.
Read net distribution and capital returned.

Frequently Asked Questions

Return of capital?

Cash distributions from refi treated as return of capital first (tax-free up to basis), then capital gain. Reduces LP tax basis in the investment. Often triggers LP economic milestone (100% return of capital) that shifts waterfall tier.

Tax shield?

Distribution from refi is generally tax-free up to LP basis — no cap gain event until exit sale. Compare to distribution from operations (taxable as income). Refi distributions are the most tax-efficient way to return capital mid-hold.

Prepayment cost?

Existing loan prepayment penalty (yield maintenance, defeasance, 5-1-1 decline): 2-15% of old loan balance. Factor into refi economics — sometimes better to wait for lower penalty window.