Highlights
A long-term rental with appreciation and solid rent coverage can become a source of capital for the next purchase.
In this file, the investor’s original purchase basis was $295,000. The refinance was built from a current value of about $351,000, and the rent supported the new payment with a 1.58 DSCR.
For the investor, the outcome was practical: the rental remained in the portfolio while part of its equity became available for the next acquisition.
A domestic real estate investor came to Ziffy Mortgage with a single-family rental in Sumter, South Carolina and a clear plan for the equity in it.
The investor had purchased the property for $295,000. By the time of the refinance, the property supported a higher value and the completed loan came in at $263,250 at 75% loan-to-value, which puts the refinance value at about $351,000.
Monthly rent and PITIA were $2,150 and $1,362, respectively, and the file came in at a 1.58 DSCR, giving the loan enough rental coverage for a cash-out refinance.
The proceeds were intended for another investment property, so the refinance helped the investor keep the rental and use its equity for portfolio growth. The file reached clear to close in 27 days and closed in 32 days.
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How the Cash-Out Refinance Worked
A cash-out refinance lets an investor replace existing financing with a new loan based on the property’s current value. After the existing loan payoff and closing costs are handled, the approved remaining proceeds go back to the borrower.
In this file, the $295,000 figure reflects the original purchase basis and the refinance was structured from the property’s current value for loan purposes.
The higher refinance value created room for the investor to access equity while keeping the property in the portfolio. Instead of tying up capital in a rental that had already appreciated, the investor used the refinance to move part of that equity into the next acquisition plan.
Why DSCR Loan Fit the File
DSCR financing worked here because the property’s rent supported the new loan payment.
The rental brought in $2,150 per month. PITIA, which includes principal, interest, taxes, insurance, and association dues where applicable, was $1,362 per month.
The $788 monthly cushion above PITIA gave the file strong rental coverage while the 1.58 DSCR meant the rent was 58% higher than the monthly PITIA used in the loan review.
With a conventional refinance, the review often leans heavily on personal income, tax returns, and debt-to-income ratio. DSCR loan, on the other hand, shifts the focus to the rental property itself, meaning that we check whether the rent can carry the payment. For this Sumter rental, the rent coverage was already in place.
What the Investor Accomplished with the Refinance
The investor kept the Sumter rental active and the property continued to operate as a long-term rental, while the released capital could be used toward another investment property. For an investor trying to grow a rental portfolio, this can be a practical use of equity.
The refinance value of about $351,000 was roughly $56,000 higher than the original $295,000 purchase basis. The $56,000 gap gave the refinance more room than the old purchase figure would suggest, and the property’s rent helped support the payment side of the file.
A refinance like this depends on both pieces working together: value creates the cash-out opportunity whereas rent coverage makes the loan structure stronger.
How the File Moved
The loan reached clear to close in 27 days and closed in 32 days. The rental income, DSCR, and refinance structure were aligned early, which helped the file move through review without losing momentum.
The timing was important because the investor planned to use the cash-out proceeds for another purchase. If the refinance dragged, the next deal could have been harder to keep on track. With clear to close in 27 days and closing completed in 32 days, the investor had a practical path to move from one rental into the next acquisition.
Cash-out refinances are strongest when the property supports the request from both sides: current value and rental income. In this file, the Sumter rental had enough equity for the refinance and enough rent coverage to support the payment. That gave the investor a clear path to pull capital from the property and use it toward the next deal.
Final Result
Ziffy Mortgage helped the investor complete a DSCR cash-out refinance on a long-term single-family rental in Sumter, South Carolina. The final loan amount was $263,250 at 75% LTV, with a 6.490% interest rate. The rental showed $2,150 in monthly rent against $1,362 in monthly PITIA, resulting in a 1.58 DSCR.
The refinance allowed the investor to keep the property, access equity from the higher current value, and use the proceeds for another investment property.
