Exiting Hard Money Loan

Houston, Texas
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Exiting Hard Money Loan

Caleb Hardesty
Beaumont, TX · Member since 2022 · 3 posts · 7 votes

Hey all,

I’ve got a single-family in Texas that I bought with hard money and the rehab is done.

Looking to move it into a long-term DSCR loan and trying to get a feel for what’s actually doable right now.

Curious what people are seeing for:

•  75% or 80% LTV on a refi out of hard money — is 80% realistic or is 75% more the norm?

•  Seasoning — how long do most lenders want you on title before they’ll use the full appraised value instead of what you have into it?

•  Do you need a lease in place, or will most lenders go off the appraisal’s market rent?

•  Rates, points, and prepay penalties on a 30-year fixed at those LTVs? Any big difference between just paying off the hard money vs. cashing out a little?

Credit’s around 730. Just trying to get a realistic picture of what to expect so I know what to look for when I start talking to lenders.

Anyone who’s done a hard money to DSCR refi recently (especially in Texas) — what kind of terms did you end up with?

Any recommendations for Texas lenders?

Appreciate any input. Thanks.

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Most Popular Reply

Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
1w

Hey @Caleb Hardesty ,

Happy to answer some of your questions:

Curious what people are seeing for:

•  75% or 80% LTV on a refi out of hard money — is 80% realistic or is 75% more the norm?

You can obtain 80% LTV on a Cash Out Refi using the new appraised value

•  Seasoning — how long do most lenders want you on title before they’ll use the full appraised value instead of what you have into it?

You can refi with no seasoning required as long as rehab is complete. Lenders will use the full new appraised value.

•  Do you need a lease in place, or will most lenders go off the appraisal’s market rent?

You can use market rent to qualify

•  Rates, points, and prepay penalties on a 30-year fixed at those LTVs? Any big difference between just paying off the hard money vs. cashing out a little?

Rates are anywhere from 6.75-8.75% depending on LTV, Prepay, Buydowns, Points, etc..

Cash outs have worse pricing compared to doing a rate and term (no cash out, just payoff the loan and closing costs)

General rule of thumb: Low points = higher rate. Long Prepay = lower rate. Purchase and rate and term = lower rate

Credit’s around 730. Just trying to get a realistic picture of what to expect so I know what to look for when I start talking to lenders.

Anyone who’s done a hard money to DSCR refi recently (especially in Texas) — what kind of terms did you end up with?

Any recommendations for Texas lenders?

Just closed a refi at 7.25% Interest-Only with .55% points last week in Temple. 5,4,3,2,1 PPP at 65% LTV. Rates change daily and depending on the scenario so take this with a grain of salt.

[email protected]818-269-7983
LuxePrivate Investments LLC 572 Reviews
WebsiteView Page
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  • Corey Wallace
    Member since 2026 · 12 posts · 0 votes
    1w

    Caleb, congratulations on finishing the rehab. I'm Corey with SKCI Funding. For a Texas DSCR refinance, the seasoning period and whether you're simply paying off the hard-money loan or taking additional cash out can make a significant difference. Have you established your current payoff and the date the hard-money loan matures? Those details would help narrow down the lending programs worth reviewing.

    0Reply
  • Neeraj Diwan
    Lender · Stamford, CT · Member since 2026 · 54 posts · 10 votes
    1w

    @Caleb Hardesty For the Beaumont refinance, I'd confirm the lender's seasoning and value-basis rules before counting on cash-out. Also compare the loan using supported long-term rent versus the proposed furnished rental income; those may be treated differently. J3 can review the payoff, requested loan amount, rehab basis, rent documentation and maturity date for potential first-position financing. Hit me up if you want to dive deeper, happy to talk to you further about this.

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1w

    Hey @Caleb Hardesty ,

    Happy to answer some of your questions:

    Curious what people are seeing for:

    •  75% or 80% LTV on a refi out of hard money — is 80% realistic or is 75% more the norm?

    You can obtain 80% LTV on a Cash Out Refi using the new appraised value

    •  Seasoning — how long do most lenders want you on title before they’ll use the full appraised value instead of what you have into it?

    You can refi with no seasoning required as long as rehab is complete. Lenders will use the full new appraised value.

    •  Do you need a lease in place, or will most lenders go off the appraisal’s market rent?

    You can use market rent to qualify

    •  Rates, points, and prepay penalties on a 30-year fixed at those LTVs? Any big difference between just paying off the hard money vs. cashing out a little?

    Rates are anywhere from 6.75-8.75% depending on LTV, Prepay, Buydowns, Points, etc..

    Cash outs have worse pricing compared to doing a rate and term (no cash out, just payoff the loan and closing costs)

    General rule of thumb: Low points = higher rate. Long Prepay = lower rate. Purchase and rate and term = lower rate

    Credit’s around 730. Just trying to get a realistic picture of what to expect so I know what to look for when I start talking to lenders.

    Anyone who’s done a hard money to DSCR refi recently (especially in Texas) — what kind of terms did you end up with?

    Any recommendations for Texas lenders?

    Just closed a refi at 7.25% Interest-Only with .55% points last week in Temple. 5,4,3,2,1 PPP at 65% LTV. Rates change daily and depending on the scenario so take this with a grain of salt.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    1Reply
  • Matthew Meredith
    Attorney · TX · Member since 2026 · 7 posts · 3 votes
    1w

    @Caleb Hardesty, I'm an attorney in Texas and one thing I like to remind real estate investors about is asset protection. You should consider whether to move the property into an LLC before taking out your DSCR loan to protect your personal assets from any risks with your real estate. Happy to discuss this further if you have any questions.

    0Reply
  • Lauren CutchenBusiness Member
    Real Estate Agent · The Woodlands, TX · Member since 2019 · 236 posts · 88 votes
    1w

    Texas DSCR lenders will care a lot about seasoning, lease vs market rent, and whether your tax estimate is real. Get the rent letter and insurance quote lined up before you shop LTV so you're not renegotiating mid-underwrite.

    [email protected]832-406-4239
    Lauren Cutchen 513 Reviews
    WebsiteView Page
    0Reply
  • Anthony Smith
    Real Estate Agent · Detroit, MI · Member since 2016 · 148 posts · 66 votes
    4d

    Caleb, the piece I'd plan around isn't the rate — it's the seasoning clock and what it does to your options. At two months on title, a lot of DSCR lenders size you off purchase plus rehab cost, not the $160K appraisal, so the refi you want may not exist yet no matter who quotes it. Knowing each lender's rule on that one question — when do you get credit for the new value — should be your first filter before you compare anything else.

    Second: qualify on the $1,500 long-term rent, because that's what the lender will do. The furnished 30-night income may be real money, but until there's a track record behind it, underwriting won't count it — and a loan sized on income the lender ignores is a loan that doesn't close.

    While you wait out seasoning, keep the exit file boring and complete: rehab receipts, before-and-after photos, the appraisal, a payoff statement. The borrowers who refi cleanly are the ones who can hand a lender the whole story in one email.

    0Reply
  • Kyle Karges
    Member since 2026 · 4 posts · 0 votes
    2d

    Caleb, the lender side has been covered pretty well in here, so I'll talk timing, because that's what usually trips people up at month two. Start with your hard money maturity date and work backward. If the lender you like needs more seasoning than you'll have, find out now if your current loan can be extended and what that takes. You don't want to refinance under a deadline. Next, put your cost file together today: settlement statement, every rehab invoice and receipt, lien waivers, before and after photos. A lot of short-seasoning lenders size the loan on cost, so a clean file helps. On rent, use long-term rent, not furnished numbers. If it only works furnished, it's tight. Last thing, run it both ways: paying it off with a little of your own cash versus pulling cash out. Sometimes the smaller loan opens better options. And let the lender tell you no, don't rule yourself out. When does your current loan mature?

    0Reply
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