Refinancing out of a rehab loan into a long-term rental loan.

What the refinance does

The refinance is the fourth step of the BRRRR method. You buy and renovate with short-term money, a fix-and-flip or bridge loan. Once a tenant is in place, a DSCR refinance pays that loan off with a 30-year fixed mortgage sized on the property's rent, and a cash-out refinance hands you the equity above what you owe.

The new loan qualifies the same way any DSCR loan does: the rent has to cover the full new payment, with a ratio above 1.0. No tax returns.

Seasoning: how long you have to own it

This is where refinances differ the most, and it decides how fast your money comes back. If you have renovated the property, we can refinance on the new appraised value as soon as the work is done, with no seasoning period. Without a renovation, plan on three to six months of ownership first.

Bring the renovation scope and what it cost. That is what supports refinancing on the new value instead of what you paid.

How much cash comes back

Cash-out goes up to about 75% of the appraised value, minus the payoff on your current loan and the closing costs. Some lenders go to 80% at a higher rate, but 75% is the practical ceiling we aim for, because the payment still has to clear the coverage ratio.

If you only need to replace the short-term loan, a rate-and-term refinance goes up to about 80% of value and can usually roll the closing costs into the loan.

Timing it against your maturity date

Rehab loans run 6 to 18 months, and extensions cost money. Start the refinance conversation before the work is finished, not after. A single-family refinance takes about 30 days from a complete file, so the lease, renovation costs, and payment history should be ready the day the property is.

If the property is not renting yet, or the numbers do not clear 1.0, find out early. The fixes (more rent evidence, a smaller loan, more cash in) all take time.