Refinance and take equity out of rental properties

Atlanta, Georgia
Creative Real Estate Financing
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Refinance and take equity out of rental properties

Erika Kandler
Member since 2025 · 2 posts · 1 vote

We have a 4 rental properties with 75% equity. They are all nice single family homes and have strong net cash flow.
We are both self employed working part time in our 60s.
In the next 3-5 years I foresee us wanting to cash some of our equity out. I prefer to not sell. My question is, how do people qualify to refinance and take equity out of investment properties

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Katie Smith
Member since 2023 · 348 posts · 190 votes
10mo

Hi Erika!

A lot of investors do this with DSCR loans. Instead of using your personal income, the lender qualifies you based on the rental income of the property. If the rent covers the new mortgage payment, you can usually refinance and pull cash out, even if you're self-employed or semi-retired. No tax returns or job verification required.With good credit and strong cash flow, most people can access about 70–75% of the property's value. It's a very common strategy for long-term rental owners who want liquidity but don't want to give up the asset.

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  • Katie Smith
    Member since 2023 · 348 posts · 190 votes
    10mo

    Hi Erika!

    A lot of investors do this with DSCR loans. Instead of using your personal income, the lender qualifies you based on the rental income of the property. If the rent covers the new mortgage payment, you can usually refinance and pull cash out, even if you're self-employed or semi-retired. No tax returns or job verification required.With good credit and strong cash flow, most people can access about 70–75% of the property's value. It's a very common strategy for long-term rental owners who want liquidity but don't want to give up the asset.

    1Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    10mo

    There is creative options if needed for loan products. You might touch base with a lender now. Start dialogue so you can have your ducks in row for down the road. 

    0Reply
  • Erika Kandler
    OP
    Member since 2025 · 2 posts · 1 vote
    10mo

    Thanks! 

    0Reply
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    10mo

    @Erika Kandler there are a few loan options out there for people in a similar position as yourself. I would be happy to share some options with you!

    [email protected]619-456-8311
    Helm Mortgage Corp.5126 Reviews
    WebsiteView Page
    0Reply
  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    10mo
    Quote from @Erika Kandler:

    We have a 4 rental properties with 75% equity. They are all nice single family homes and have strong net cash flow.
    We are both self employed working part time in our 60s.
    In the next 3-5 years I foresee us wanting to cash some of our equity out. I prefer to not sell. My question is, how do people qualify to refinance and take equity out of investment properties

    Good plan.
    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 521 votes
    10mo

    You can do a DTI (debt to income loan) or you can do a DSCR loan.

    Often people who are self employed write off a lot of expenses when doing their taxes which can potentially be an issue when trying to qualify for a DTI loan.

    More on DSCR loans: DSCR loans won't use your income to underwrite the loanDSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the better. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    Happy to connect to discuss further. 

    [email protected]818-770-0340
    Bright Skyline518 Reviews
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    1Reply
  • Mark Bassali
    Lender · Los Angeles, CA · Member since 2018 · 67 posts · 35 votes
    10mo

    DSCR programs are usually the best fit for a cash-out refinance on investment properties. They're typically capped up to 75% LTV, which lets you leverage existing equity without relying on personal income, as long as the property cash flow supports it.


    0Reply
  • Pierre Guirguis
    Lender · Marlboro, NJ · Member since 2025 · 243 posts · 150 votes
    9mo

    Most refinances on investment properties are qualified based on the property income itself rather than personal income, especially when the rentals are seasoned and cash flowing. In practice, lenders focus on in-place rents, operating expenses, and whether the net income comfortably covers the new debt service after the refinance.

    Being self-employed and part-time matters less on the investment side than it would on an owner-occupied loan, but documentation and consistency still matter. Clean rent rolls, leases, tax returns, and expense records usually carry more weight than W-2 income.

    One thing to think through ahead of time is timing. As people get closer to wanting liquidity, it often makes sense to refinance while the properties are performing well rather than waiting until income drops or management becomes more passive. Cash-out refinances are generally easier when nothing feels urgent.

    The other tradeoff is leverage. Pulling equity out can make sense, but it changes cash flow and risk. Many people find a middle ground by taking out only part of the available equity so the properties remain comfortably cash flowing even if rates or expenses move.

    The exact qualification details vary by lender and structure, but at a high level it is usually about property performance, documentation, and choosing the right timing rather than personal employment status alone.

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    9mo
    Quote from @Erika Kandler:

    We have a 4 rental properties with 75% equity. They are all nice single family homes and have strong net cash flow.
    We are both self employed working part time in our 60s.
    In the next 3-5 years I foresee us wanting to cash some of our equity out. I prefer to not sell. My question is, how do people qualify to refinance and take equity out of investment properties


    Most self-employed investors will use a DSCR loan for investment properties. Instead of underwriting based on your personal financials, lenders will examine the property's cashflow, value, and your personal credit. No personal income or expenses will be needed to qualify.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 570 Reviews
    WebsiteView Page
    0Reply
  • Alan AsriantsBusiness Member
    Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
    9mo

    For self employed individuals DSCR is the way to go. Its usually a very easy process and does not require much docs. Your credit score will determine your rate. Shop it around tho, DSCR rates can actually be pretty aggressive some even offer:

    1. Guarantee that the loan won't show up on your credit

    2. Your DSCR ratio - the higher the better the rate

    3. Your LTV - the lower the better your rate

    Happy to connect you to a Lender. 

    [email protected]267-767-0111
    Alan Asriants - New Century Real Estate 592 Reviews
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