Many Baton Rouge investors own rentals they bought cheaply years ago, sometimes free and clear, while their next deal sits waiting for a down payment. A DSCR cash-out refinance turns that equity into cash using the rent, not your tax returns, to qualify.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals across the Baton Rouge metro up to 75% LTV. The loan qualifies on the property's rent with a 1.0x standard minimum DSCR and a 620 minimum credit score, with no W-2s or tax returns. Loans start at $150,000, LLC owners are standard and seasoning requirements vary by program.
The most common reason is buying the next property. An investor with three paid-off brick ranch homes in Central or Denham Springs can pull equity from one and fund the down payment on a duplex near LSU. Others use proceeds to repay a family loan, cover a roof replacement across several rentals, or consolidate an expensive line of credit.
Because DSCR loans look at the property instead of personal income, investors who show low taxable income after depreciation can still qualify.
Others refinance to take equity out of a rental they plan to keep for many years, locking in a long-term payment while the property's rent continues to rise.
The loan amount is capped by two tests. First, cash-out goes up to 75% of the appraised value, sometimes lower on 5-8 unit properties or larger balances. Second, the rent has to cover the new payment, including taxes, insurance and any flood policy, at the program's DSCR minimum.
In this market, the second test often binds first. Insurance premiums have climbed across south Louisiana, so a rental that cash-flowed well on an old policy may show a thinner ratio at renewal. Get a current quote before you apply.
If the ratio is tight, you can still cash out at a lower loan amount. Running the numbers at 75%, 70% and 65% LTV usually shows where the rent comfortably covers the payment.
This example is illustrative and not a quote. An investor owns a Denham Springs home outright that appraises at $260,000 and rents for $2,000 a month. The home is in a lower-risk flood zone and was elevated during its post-2016 rebuild, so the investor carries no separate flood policy. Taxes are $235 and insurance $285 a month.
At 75% LTV the new loan is $195,000. Estimated principal and interest is about $1,363, the total payment is near $1,883 and the DSCR is about 1.06x. After estimated closing costs of $6,500, the investor nets about $188,500. At 70% LTV, the loan is $182,000 and the ratio rises to about 1.12x.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| New loan | $195,000 | $182,000 |
| Estimated principal and interest | $1,363 | $1,273 |
| Taxes and insurance | $520 | $520 |
| Total payment | $1,883 | $1,793 |
| DSCR at $2,000 rent | 1.06x | 1.12x |
| Cash before closing costs | $195,000 | $182,000 |
Cash-out amounts depend on the appraisal, and Baton Rouge values vary sharply within short distances. A renovated cottage in Mid City can sit near unrenovated homes selling for far less. Help the appraiser by listing improvements with dates and costs: roof, HVAC, wiring, plumbing and any elevation work. For homes rebuilt after 2016, documentation of the rebuild and permits matters.
The example also shows why investors in this market rarely take the maximum. Insurance and taxes are a meaningful share of the payment on a modestly priced home, so a few percent of LTV can move the ratio noticeably. Choosing the loan amount is a tradeoff between cash today and cushion every month.
If you bought or rehabbed the property recently, seasoning rules decide whether the loan uses the appraised value or your cost basis. Requirements vary by program; our seasoning guide explains the common approaches. If the property was just renovated and you are paying off a rehab loan with little cash coming out, a rate-and-term refinance may be the better fit.
If the appraisal comes in lower than you expected, you can still close at a smaller loan amount, or ask for a reconsideration with additional comparable sales.
Louisiana does not have a statewide mortgage or transfer tax on a refinance, but you will pay for title insurance, recording, the appraisal and settlement. Keep in mind that parishes reappraise every four years, so a tax increase may be coming even if your loan does not change. If title is in your personal name and you want it in an LLC, talk to your title company and tax advisor about timing.
Ask for a written estimate of all closing costs early, so the net cash figure you plan around is accurate.
Proceeds from a cash-out refinance are yours to use for business purposes. In Baton Rouge, the most common use is a down payment on the next rental, often a duplex or fourplex near LSU or a newer house in Prairieville. Some investors use the cash to fund rehab on a property they bought with cash, then refinance that property too.
Before you spend it, keep reserves. Lenders on your next purchase will want to see money in the bank after closing, and a hurricane deductible or roof claim on any of your rentals can arrive with little warning. A cash-out that leaves you with no cushion is a weaker position than a smaller cash-out with reserves intact.
LendingStreet refinances rentals across East Baton Rouge, Ascension, Livingston and West Baton Rouge parishes. Our investor loans are business-purpose loans on non-owner-occupied property. Tell us the value, rent and cash you need using the form below, and we will show the payment at more than one loan amount.
Up to 75% of the appraised value, minus any existing liens and closing costs, as long as the rent covers the new payment at the program minimum.
Yes. A paid-off rental is one of the most common cash-out situations.
No. DSCR loans qualify on the property's rent, not personal income.
Seasoning varies by program. See our seasoning guide for the common rules.
It can. Any required flood premium counts in the payment, which affects the DSCR and the maximum loan.
Yes. The rent of all units counts toward the ratio on 2-8 unit properties.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Yes. If you own five or more rentals, a blanket portfolio loan can refinance them together with one closing and qualify on combined cash flow.
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