Investors who bought Bakersfield rentals a decade ago often have far more equity than they realize. A DSCR cash-out refinance turns that equity into cash for the next purchase without income documents, and refinancing alone does not reset your Prop 13 assessment.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals in Bakersfield and Kern County up to 75% LTV, qualified on the property's rent rather than tax returns. Loans start at $150,000, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Cash-out seasoning varies by program.
Many rentals bought in the years after the housing downturn were purchased at low prices and have appreciated substantially. Rents have risen too, which helps the new, larger loan still clear the ratio.
Common uses are buying another rental, funding a flip, paying off a partner, or consolidating several small loans.
A cash-out is also a way to rebalance. Investors who own several free-and-clear or low-balance rentals can pull equity from one property to put down payments on others, keeping their overall leverage moderate.
Before you choose an amount, decide what the cash is for and how quickly you will use it. Cash sitting idle still costs interest every month.
A refinance by itself is not a change in ownership, so your assessed value and tax bill stay on their Prop 13 track. That is one reason a cash-out refinance can be more efficient here than selling and buying.
Moving title, however, can be different. If you transfer a rental from your personal name into an LLC before refinancing, that transfer may be treated as a change in ownership unless an exclusion such as the proportional-interest rule applies, and later changes in LLC control can also trigger reassessment. Talk with a California tax adviser before you deed anything.
This example is illustrative and not a quote. An investor bought a Southwest Bakersfield home in 2016 for $230,000. It is now worth $400,000, leases for $2,400 and has a $148,000 balance. Because of Prop 13, the assessed value has grown slowly, and taxes are about $263 a month.
At 75% LTV the new loan is $300,000. After paying off $148,000 and estimated closing costs of $9,500, the investor receives about $142,500. Estimated principal and interest is about $2,096, and with taxes and insurance the payment is about $2,509, for a DSCR of about 0.96x.
| Item | Amount |
|---|---|
| Current value | $400,000 |
| New loan at 75% LTV | $300,000 |
| Payoff of existing loan | $148,000 |
| Estimated closing costs | $9,500 |
| Estimated cash to investor | $142,500 |
| Total monthly payment | $2,509 |
| DSCR | 0.96x |
If you bought recently, especially with cash or a short-term loan, seasoning rules decide whether the loan is based on the current appraised value or your cost. Requirements vary by program.
If you bought within the last several months and finished a rehab, ask about using the new value. Our seasoning guide explains the common rules.
If you recently finished a rehab, gather receipts, permits and before-and-after photos. An appraiser who understands the work is more likely to support the new value.
Long-time Bakersfield landlords often have tenants paying well below market. The appraiser will estimate market rent, and some programs use the lower of the lease and market rent for qualifying.
AB 1482 limits annual increases on many older rentals, so a below-market lease can take years to catch up. If the ratio is tight at today's rent, take less cash rather than counting on increases.
Appraisers will also check the condition of older homes. Peeling paint, roof wear or obvious repairs can reduce value or delay closing, so handle small fixes before the inspection.
Investors with several Bakersfield rentals can refinance them one at a time or, with five or more properties, look at a blanket portfolio loan with one closing and one payment.
Portfolio loans have release provisions so you can sell one property without refinancing the rest.
A portfolio refinance can also pull cash from several properties at once.
California refinances close through title and escrow. There is no transfer tax on a refinance because the deed does not change, but title insurance, escrow and recording fees apply.
See our California cash-out page for statewide notes. Call (877) 298-1001 or use the form below with the address, current balance and rent.
Lenders will want to see insurance with the new loan on it. California carriers have been selective, so confirm your policy can be updated before you lock in a closing date.
If the new payment would push the DSCR below 1.0x, a smaller cash-out or a rate-and-term refinance may fit better. If you need the money only briefly, a bridge loan could be cheaper over a short period.
Run the numbers both ways with our DSCR calculator before you decide how much equity to pull out.
Many long-time Kern County landlords own rentals outright. A DSCR cash-out on a free-and-clear property works the same way: the new loan is up to 75% of value, and the full amount after closing costs goes to you.
Because there is no existing payoff, the DSCR is often comfortable even at full leverage. The main questions are the appraisal, the property condition, and whether the rent in place supports the payment.
Up to 75% of the appraised value, minus your payoff and closing costs, as long as the rent supports the new payment at the program's minimum DSCR.
A refinance alone is not a change in ownership under Prop 13, so it should not reset your assessed value. Transferring title into a new entity can be different.
Yes. Some investors want an LLC on title, but moving title can carry Prop 13 consequences. Get tax advice first.
Seasoning varies by program. Recent purchases may be valued on cost rather than appraised value until the seasoning period passes.
No. DSCR cash-out loans qualify on rent compared with the new payment, plus credit and reserves.
Yes. Qualifying rent is the combined rent of all units. 5-8 unit buildings also qualify, with max LTV that varies by program.
Some programs use the lower of the lease and market rent. If the ratio is tight, take a smaller cash-out amount.
Yes. With no existing loan to pay off, the cash-out amount is up to 75% of value minus closing costs, as long as the rent supports the payment.
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