Los Angeles owners who have held rentals for years often sit on very large equity balances. A DSCR cash-out refinance can unlock it based on rent, but in a high-price market the rent, not the value, usually sets how much cash you get.
In short: Yes. LendingStreet refinances Los Angeles investment properties with cash out up to 75% LTV, qualifying on rent instead of tax returns, with loans from $150,000 and a 620 minimum credit score. The rent must cover principal, interest, taxes, insurance and HOA dues at the program minimum. In Los Angeles the realities to plan for are a ratio that is tight at high values, rent control and tenant protection rules that cap increases, and insurance availability after the 2025 wildfires.
The idea is simple: the appraiser sets today's value, the lender lends up to 75% of it on a cash-out, your old loan is paid off and the rest is yours, before closing costs. Credit needs to be 620 or higher, and the property must be a non-owner-occupied rental with one to eight units.
What decides the amount is the debt service coverage ratio. The rent, from a lease or the appraiser's market rent estimate, is divided by the full new payment including taxes, insurance and any HOA. Because the cash-out raises the payment, run the ratio on the new loan, not the old one.
Small multifamily is the backbone of LA rental investing: duplexes, triplexes, fourplexes and 5-8 unit buildings in South LA, Highland Park, Eagle Rock, Mid-City, Koreatown and across the San Fernando Valley in Van Nuys, North Hollywood and Reseda. Many single-family owners have added accessory dwelling units under California's ADU laws, which can raise the rent that counts.
Outside the city, Long Beach, Pasadena, Inglewood and the Antelope Valley cities of Lancaster and Palmdale each have their own rules. Balances above about $1.5 million are common for a cash-out here, which puts many LA files in jumbo DSCR territory where larger balances get more review and max LTV can be lower.
Under Proposition 13, property is assessed at its purchase price with annual increases capped at 2%, and a refinance does not trigger reassessment. Long-held LA rentals can therefore carry a tax bill far below what a new buyer would pay, which helps the ratio.
Bills include the base 1% levy plus voter-approved bonds and special assessments that vary by area. Use your actual Los Angeles County bill, and note that adding an ADU can add assessed value for the new construction.
The January 2025 Palisades and Eaton fires tightened an already difficult insurance market. Some owners in hillside and brush areas can only get coverage through the California FAIR Plan with a separate policy for other perils, and premiums have risen. The lender counts the full insurance cost in the payment, so get quotes early.
California's documentary transfer taxes, including the City of Los Angeles Measure ULA tax on high-value sales, apply to transfers, not to a refinance where you keep title. Expect title, escrow, recording, appraisal and lender fees.
In the City of Los Angeles, the Rent Stabilization Ordinance generally covers buildings with two or more units built before October 1978, and the statewide Tenant Protection Act caps increases on many other rentals more than 15 years old. Underwriting uses the actual in-place rent, so below-market RSO units limit the loan.
The city's Home-Sharing Ordinance allows short-term rentals only in a host's primary residence, so a non-owner-occupied STR in the City of Los Angeles is generally not allowed. If you want STR income, look at markets elsewhere in California where STRs are permitted with a local license, such as parts of the mountain and desert resort areas, and check each county's rules.
This example is illustrative and not a quote. An investor owns a fourplex in the San Fernando Valley with total rent of $10,000 a month, bought years ago with a low Prop 13 tax base. The property appraises at $1,600,000, the existing loan balance is $600,000, and taxes and insurance run about $1,900 a month against total rent of $10,000.
At the full 75% LTV, the $1,200,000 loan would carry estimated principal and interest of about $8,391, a total payment near $10,291 and a DSCR of only 0.97x. The rent instead supports a loan of about $1,155,000, roughly 72% of value, with a payment near $9,976 and a DSCR of about 1.00x. After paying off $600,000, that still leaves about $555,000 before closing costs. If the insurance premium rose on renewal, adding $300 a month, the ratio would slip to about 0.97x, so the rent, not the appraisal, is what caps this cash-out. A sub-1.0x program could size closer to the LTV limit, with terms that vary by program.
| Item | Amount |
|---|---|
| Appraised value | $1,600,000 |
| Maximum loan at 75% LTV | $1,200,000 |
| Existing loan payoff | $600,000 |
| DSCR at the full 75% LTV | About 0.97x |
| Loan the rent supports | $1,155,000 |
| Cash before closing costs | $555,000 |
| Estimated principal and interest | About $8,076 |
| Taxes and insurance | $1,900 |
| Total monthly payment | About $9,976 |
| DSCR at $10,000 rent | About 1.00x |
In many LA files the rent supports a loan well below 75% of value. If you mainly want to replace an adjustable or maturing loan, a rate-and-term refinance on the same balance may be simpler, and you can take cash on a different property where the ratio is stronger.
Two limits apply at once: 75% of the appraised value, and the loan the rent can support at the program minimum. Whichever is lower sets the cash. On two- to four-unit properties, the combined rent of all units counts, and on 5-8 unit buildings max LTV can be lower, so it varies by program. If the ratio falls short, programs below 1.0x exist, or a rate-and-term refinance may fit better.
Seasoning also matters. Some programs allow a cash-out soon after purchase, while others want several months of ownership or cap the loan at purchase price plus documented improvements. For rules that apply statewide, see our California cash-out page.
A complete file usually closes faster and with fewer surprises.
Yes. Our investor loans are business-purpose loans on non-owner-occupied property. In Los Angeles we finance cash-out refinances on 1-8 unit rentals up to 75% LTV, with loans from $150,000.
No. A refinance is not a change in ownership, so your assessed value stays on its Prop 13 track.
Often, yes, if the ADU is permitted. The appraiser will look at the combined rent, and unpermitted units usually cannot be counted.
Non-owner-occupied short-term rentals are generally not allowed in the city. Investors who want STR income usually buy in California areas that license them.
No. The loan qualifies on the property's rent. You still need a 620 or higher credit score, reserves and LLC documents if the property is held in an entity.
Seasoning varies by program. Some allow a cash-out shortly after purchase; others want several months of ownership or limit the loan to cost plus documented improvements.
You can take a smaller loan that the rent covers, look at programs that allow a ratio below 1.0x, or compare a rate-and-term refinance.
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