If your investment properties have appreciated, you may be sitting on significant untapped equity. A cash-out refinance on a DSCR loan lets you pull that capital out — no seasoning, no tax returns.
The Equity Harvesting Strategy
Real estate investors who bought Florida rental properties in 2019–2022 are sitting on significant equity gains. Rather than selling and paying capital gains taxes, a cash-out refinance lets you extract that equity as tax-free cash — which you can deploy into your next acquisition.
How a DSCR Cash-Out Refi Works
On investment properties, DSCR lenders allow cash-out refinances at up to 75% LTV. There's no requirement to document your personal income — the property's rental income is what qualifies you.
Example: You purchased a Tampa rental property in 2021 for $280,000. It's now worth $380,000. Your current loan balance is $220,000. A cash-out refinance at 75% LTV gives you a new loan of $285,000 — putting $65,000 in your pocket to fund the next deal.That $65,000 could be the down payment on a 25% down DSCR purchase at $260,000. You've effectively used appreciation to fund portfolio expansion without using new cash.
DSCR Cash-Out Guidelines
- Max LTV: 75% for 1–4 unit properties
- Min DSCR on new loan: 1.0x (at minimum — 1.20x+ gets better pricing)
- Min credit: 620 FICO
- LLC vesting: Allowed
- Seasoning: Most lenders require 6–12 months of ownership
Nicholas Menard
NMLS #202425 · Senior Loan Officer
Nicholas Menard is a senior loan officer at Edge Home Finance LLC specializing in DSCR investor loans, first-time buyer programs, and refinancing strategies for Florida homeowners and investors.
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