SMAC Mimetic LCL161 Alone or With Cyclophosphamide in Treating Patients With Relapsed or Refractory Multiple Myeloma

Inclusion Criteria: * Relapsed or refractory multiple myeloma and has already received =\< 4 standard treatment regimens; note: induction, transplant, consolidation, and maintenance is considered one regimen * Have received prior therapy with an immunomodulatory agent, a proteosome inhibitor, and glucocorticoids * Absolute neutrophil count (ANC) \>= 1000/uL * Untransfused platelet count \>= 75,000/uL * Aspartate aminotransferase (AST) =\< 3 x upper limit of normal (ULN) * Alanine aminotransferase (ALT) =\< 3 x ULN * Total bilirubin =\< 1.5 mg/dL * Serum creatinine =\< 2.5 mg/dL * Hemoglobin \>= 8 g/dL * Measurable disease of multiple myeloma as defined by at least ONE of the following: * Serum monoclonal protein \>= 1.0 g/dL * \>= 200 mg of monoclonal protein in the urine on 24 hour electrophoresis * Serum immunoglobulin free light chain \>= 10 mg/dL AND abnormal serum immunoglobulin kappa to lambda free light chain ratio * Monoclonal plasmacytosis \>= 30% (evaluable disease) * Measurable plasmacytoma that has not been radiated * Eastern Cooperative Oncology Group (ECOG) performance status (PS) 0, 1, 2 * Willing and able to comply with scheduled visits, treatment plan and laboratory tests * Able to swallow and retain oral medication * Provide informed written consent * Negative serum pregnancy test done =\< 7 days prior to registration, for women of childbearing potential only * Willing to provide all biological specimens as required by the protocol for correlative research purposes * Willing to return to enrolling institution for follow-up (during the active monitoring phase of the study) * Mayo Clinic Arizona only: Willing to participate in associated biobanking study, 919-04; the patient must sign consent to enroll onto the mandatory companion biobanking study in order to participate in this treatment study * Mayo Clinic Rochester and Florida only: Willing to participate in associated biobanking study, 521-93; the patient must sign consent to enroll onto the mandatory companion biobanking study in order to participate in this treatment study Exclusion Criteria: * Prior use of investigational drugs =\< 14 days prior to registration * Prior use of growth factors =\< 14 days prior to registration * Prior radiation therapy =\< 14 days prior to registration * Prior autologous stem cell transplant =\< 12 weeks prior to registration * Any of the following: * Pregnant women * Nursing women * Women of childbearing potential who are unwilling to employ adequate contraception while receiving treatment on this study and for 4 months after stopping treatment on this study * Men who are unwilling to use a condom (even if they have undergone a prior vasectomy) while having intercourse with any woman, while receiving treatment on this study and for 4 months after stopping treatment on this study NOTE: Postmenopausal women are allowed to participate in this study; women are considered post-menopausal and not of child bearing potential if they have had 12 months of natural (spontaneous) amenorrhea with an appropriate clinical profile (e.g. age appropriate, history of vasomotor symptoms) or have had surgical bilateral oophorectomy (with or without hysterectomy) or tubal ligation at least six weeks ago; in the case of oophorectomy alone, a woman is considered to be of not child bearing potential only when her reproductive status has been confirmed by follow-up hormone level assessment * Prior allogeneic transplant of any kind * Known active infection requiring parenteral or oral anti-infective treatment * Serious psychiatric illness, active alcoholism, or drug addiction that may hinder or confuse follow-up evaluation * Known human immunodeficiency virus (HIV) or active hepatitis B or C viral infection * Active autoimmune/inflammatory conditions requiring ongoing immunosuppressive therapy * Use of more than low dose corticosteroids (e.g., prednisone up to but no more than 10 mg PO QD or its equivalent) for symptom management and comorbid conditions, except for the following: * Topical applications (e.g. rash) * Inhaled sprays (e.g. obstructive airways diseases) * Eye drops or local injections (e.g. intra-articular) * Joint injections (e.g. arthritis) Doses of corticosteroid should be stable for at least 7 days prior to registration * Any concurrent severe and/or uncontrolled medical conditions that could increase the patient's risk for toxicity while in the study or that could confound discrimination between disease- and study treatment-related toxicities * Impaired cardiac function or clinically significant cardiac diseases, including any of the following: * History or presence of ventricular tachyarrhythmia * Presence of unstable atrial fibrillation (ventricular response \> 100 bpm) (NOTE: patients with stable atrial fibrillation are eligible, provided they do not meet any of the other cardiac exclusion criteria) * Clinically significant resting bradycardia (\< 50 bpm) * Angina pectoris or acute myocardial infarction =\< 3 months prior to registration * Other clinically significant heart disease (e.g., symptomatic congestive heart failure; uncontrolled arrhythmia or hypertension; history of labile hypertension or poor compliance with an antihypertensive regimen) * Currently receiving treatment with agents that are metabolized solely through cytochrome P450, family 3, subfamily A, polypeptide 4/5 (CYP3A4/5) and have a narrow therapeutic index or are strong cytochrome P450, family 2, subfamily C, polypeptide 8 (CYP2C8) inhibitors; or are receiving treatment with agents that carry a risk for QT prolongation and are CYP3A substrates; caution should be used in patients taking other CYP2C8- or CYP3A4/5-interacting agents * Impaired gastrointestinal (GI) function or GI disease that may significantly alter the absorption of LCL161