You bought it, leased it and stabilized it. Now the Texas property is worth more than the loan against it, and a cash-out refinance can turn some of that equity into capital for the next deal. The new appraisal and the NOI decide how much comes out.
In short: LendingStreet offers commercial cash-out refinance loans on stabilized, cash-flow-positive Texas investment property, including retail, office, flex, self-storage, mixed-use and 9+ unit apartments, with custom terms up to $5M+. Proceeds are sized on the property's NOI, DSCR and the new appraised value, and maximum leverage varies by program, property type and balance. Our investor loans are business-purpose loans on non-owner-occupied property, made to LLCs and other entities.
The typical borrower has owned a Texas commercial property long enough to stabilize it: vacancies filled, leases signed, renovations finished and an operating history that shows the income. Common uses for proceeds include buying another property, funding improvements on a different building, or paying off a short-term bridge loan and pulling out part of the equity created.
Cash-out loans require stabilized income. If the property is still in lease-up or renovation, a commercial bridge loan is usually the right tool until the income is in place. For 1 to 8 unit residential rentals, see the Texas 5-8 unit and metro DSCR pages.
Two limits apply, and the lower one wins. The LTV limit is a share of the new appraised value, and it is usually lower on a cash-out than on a purchase. The DSCR limit is the loan amount the NOI can support while still meeting the program's minimum ratio. On many Texas properties, high taxes and insurance make the DSCR limit the one that binds.
Your existing loan balance, closing costs and any required reserves come out of the new loan amount. What is left is your cash out.
This example is illustrative and not a quote. Every figure is an assumption for a hypothetical stabilized Texas self-storage facility with an existing loan of $1,200,000.
The new appraisal is assumed at $3,000,000, and underwritten NOI after the lender's vacancy, expense and reserve assumptions is $212,000. A new loan of $1,950,000 is 65% LTV. Estimated annual debt service is about $165,386, for a DSCR of about 1.28x.
After repaying the existing loan, gross proceeds are $750,000 before closing costs and any reserves. If taxes on the new appraised value came in higher, the DSCR would fall and the loan amount would be reduced until the ratio was back in range.
| Line | Amount |
|---|---|
| New appraised value | $3,000,000 |
| Underwritten NOI | $212,000 |
| New loan amount | $1,950,000 |
| LTV | 65% |
| Estimated annual debt service | $165,386 |
| DSCR | 1.28x |
| Existing loan payoff | $1,200,000 |
| Gross cash out before closing costs | $750,000 |
Stabilized does not mean full. It means occupancy and rents are steady enough that the trailing operating history supports the NOI. Lenders look at how long the current occupancy has held, whether rents are at market, how many leases roll soon and whether recent improvements are complete.
| Property type | Signs of stabilization | Common concern |
|---|---|---|
| Retail and flex | Leased bays with term remaining | Several leases expiring at once |
| Office | Steady occupancy with multi-year leases | Upcoming tenant improvement costs |
| Self-storage | Consistent occupancy over trailing months | New competing supply nearby |
| 9+ unit apartments | Steady occupancy at current rents | Recent renovations not yet seasoned |
| Mixed-use | Storefronts and apartments both leased | Commercial share with short remaining terms |
The case for a cash-out looks different in each market. In Dallas and Fort Worth, investors who bought and leased up older retail or flex property in established suburbs often refinance once leases are signed and seasoned. In Houston, many stabilized properties carry higher insurance costs, which can limit proceeds even when values have risen. In Austin, values on older buildings near growing corridors may have moved faster than rents, so the DSCR limit can bind well before the LTV limit. In San Antonio, stabilized small retail and storage are common candidates.
Whatever the market, a cash-out is easiest when the rent roll is clean, leases have meaningful term left, and the trailing statements show the same income the appraisal relies on.
Texas has no state income tax, so local governments rely on property taxes. The county appraisal district sets the appraised value and local taxing units set the rates. A refinance appraisal is not the same as the appraisal district's value, but if the district has been raising the value as the property stabilized, the tax line in your NOI should reflect that.
Owners can protest the appraised value each year. If you have recently won a protest, share the result; underwriting will still look at whether the lower value is likely to hold. Confirm current rates and deadlines with your appraisal district.
Hail and wind affect premiums across Texas, and recent renewals may be higher than the trailing statement shows. On the Gulf Coast, including Houston and Corpus Christi, windstorm and flood coverage can be a large expense. Underwriting uses your current premium or a new quote, not an older figure, so bring the latest declarations page.
Texas does not publish sale prices, so commercial comps come from appraiser research and market participants. A refinance appraisal leans heavily on the income approach, which is good news for a well-documented stabilized property. Clean operating statements and a current rent roll support the value as much as any comp.
In smaller markets such as Lubbock, Waco, El Paso, McAllen, Midland-Odessa or College Station, comps can be especially thin, and the appraiser may look farther afield. Plan for that in your timeline.
Commercial refinances take longer than residential ones. Expect a full appraisal, rent roll and lease review, and often environmental and property-condition reports. Having documents ready shortens the process.
Yes, if it is stabilized and cash-flow positive. Proceeds are sized on NOI, DSCR and the new appraised value.
Maximum leverage varies by program, property type and balance, and is often lower than on a purchase. The DSCR the NOI supports may set a lower amount.
Often, yes. Once the property is stabilized and the operating history supports the NOI, a permanent cash-out loan can repay the bridge and release some of the equity created.
It depends on the program and how long the income has been stable. Recent leases and renovations may need some seasoning before they count fully.
It can. A lower appraised value lowers the tax line and raises NOI, but underwriting looks at whether the reduction is likely to hold.
Yes. Every commercial cash-out requires a full commercial valuation.
Proceeds are for business purposes, such as buying or improving other investment property. Our investor loans are business-purpose loans on non-owner-occupied property.
Call (877) 298-1001 or use the form below to get a quote. Share the rent roll, operating statements and current loan payoff to get an early read on proceeds.
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