One of the biggest mindset shifts in short-term rental investing is realizing that your properties don’t have to live in silos.
Sometimes, the smartest move isn’t squeezing a little more cash flow out of one house — it’s leveraging one asset to dramatically improve another. That’s exactly what we did. Here’s how a strategic refinance helped us gain full ownership of a high-performing property, build massive equity, and increase our overall profitability.

The Original Partnership
In fall of 2022, we purchased Play All Day Retreat with partners.

Our partnership structure looked like this:
• We received 50% of profits
• Plus an additional 15% for managing the property and holding the note in our name

So in total, we earned 65% of profits, while our partners received 35%. In both 2023 and 2024, Play All Day Retreat produced about $100,000 in profit each year, which meant we were taking home roughly $65,000 annually. Solid returns — but things got interesting in late 2024.

The Buyout Opportunity:
Our partners approached us about exiting the partnership so they could move their capital into another investment.
We ordered an appraisal to determine current value. To buy them out (original investment plus appreciation), we needed $120,000.
The problem?
We didn’t have that amount sitting in cash. But we did have another asset.

Enter Our Second Property
Earlier in summer 2024, we had purchased another home (By My Side). It was a brand-new build, but not exactly our style. The upside? We negotiated a $35,000 builder credit, which covered:
• Repainting the entire home
• New kitchen cabinets
• All lighting fixtures
• Removing a tub and tiling a walk-in shower

After closing, we also invested $40,000 to expand the back deck and add:
• Covered outdoor living
• An outdoor kitchen
• A hot tub

Originally, our mortgage on this property was $2,548 per month. Then we made a strategic decision.

The STR Hack: Cash-Out Refinance
With the improvements made at By My Side, there was a significant increase in appraised value. So, we completed a cash-out refinance on By My Side to pull the capital needed to buy out our partners. This raised our monthly mortgage from $2,548 to $4,155.

Yes — that’s a big jump.
And yes — it reduced profitability on that property.

Here’s what that looked like in real numbers:
• If we had kept the original mortgage, By My Side would have profited about $43,000 in 2025
• After refinancing, it instead profited roughly $24,000

So we reduced profit on that property by about $19,000.
But here’s where the strategy paid off.

The Bigger Picture: Cash Flow
By buying out our partners, we went from earning 65% of Play All Day Retreat… to owning 100% of it. That single move increased our annual profit on that property from $65,000 in 2024 to approximately $112,000 in 2025.
Let’s do the math:
• Lost profit on By My Side: –$19,000
• Gained profit on Play All Day Retreat: + $47,000
Net result?
+$28,000 in additional profit in 2025.
We gave up some cash flow on one property to unlock significantly more on another.

The Even Bigger Win: Equity
The increased cash flow is great — but honestly, the equity position is even more powerful.

Here’s what things look like today:
• Expected appraisal value: ~$1.3 million
• Current loan balance: ~$620,000

That puts our current equity at approximately $680,000.

And now?
We own 100% of it.
No partners.
No profit splits.

No shared decision-making.

Which means:
• We control all future cash flow
• We control all appreciation
• We can leverage this equity for future purchases
• We have the option to do another cash-out refinance if we want to scale faster

This wasn’t just a cash-flow move. It was a long-term wealth and scalability move.

Numbers Snapshot (Post Buyout)
Play All Day Retreat
• Estimated current value: $1,300,000

• Current loan balance: $620,000
• Total equity: ~$680,000

Annual Performance (2025)
• Profit from Play All Day Retreat (100% ownership): ~$112,000
• Profit from By My Side (after refinance): ~$24,000

Strategy Impact
• Reduced profit on By My Side: –$19,000
• Increased profit on Play All Day Retreat: + $47,000
• Net annual gain: +$28,000