Investors who bought Portland multi-families a decade ago are often sitting on much more equity than debt. A DSCR cash-out refinance turns some of that equity into cash for the next purchase or for building improvements, without using personal income to qualify.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals in greater Portland, Maine up to 75% LTV, qualified on the property rent with no W-2s or tax returns. The new payment must still meet the program DSCR minimum, standard 1.0x, and cash-out seasoning varies by program. LLC borrowers are standard.
Values on the peninsula and in close-in neighborhoods rose a lot over the past decade, while many owners kept low balances or paid them down. That gap is the equity a cash-out refinance can reach. Common uses are a down payment on the next building, energy upgrades like heat pumps and insulation, or paying off a higher-cost loan.
Cash-out proceeds are also commonly used to fix deferred maintenance that has piled up on older buildings: new roofs, replacement windows, porch and stair repairs, and electrical service upgrades. Improving the building can raise rents on turnover and lower insurance costs, which helps the ratio on your next refinance.
This example is illustrative and not a quote. An owner bought a three-unit building years ago and now owes $360,000. It appraises at $950,000. At 75% LTV the new loan is $712,500. After paying off the existing loan and an estimated $19,000 in closing costs, about $333,500 comes back in cash.
The three units rent for about $2,350 each, or $7,050 a month. Estimated principal and interest on the new loan is about $4,861, with taxes of $1,150 and insurance of $330, for a total of $6,341 and a DSCR of about 1.11x.
| Item | Amount |
|---|---|
| Appraised value | $950,000 |
| New loan at 75% LTV | $712,500 |
| Existing balance paid off | $360,000 |
| Estimated closing costs | $19,000 |
| Estimated cash to owner | $333,500 |
| New monthly payment (PITI) | $6,341 |
| DSCR at $7,050 rent | 1.11x |
Long-held Portland buildings often have long-term tenants paying well under market. A cash-out is sized on the rent the lender can use, typically the lower of signed leases and market rent, so below-market leases can shrink the loan. Portland's rent stabilization ordinance limits annual increases on covered units, so you may not be able to close the gap quickly. Run the ratio on current leases first.
If a few units are below market and one is about to turn over, timing matters. Renovating and re-leasing that unit before the appraisal can lift the qualifying rent. Weigh that against Portland's notice and rent increase rules for existing tenants, which you should review with the city or a local attorney.
Recent turnover leases at market rent are the strongest evidence you can give the appraiser for the rest of the building.
Cash-out seasoning, meaning how long you must have owned the property, varies by program. If you bought recently, a rate-and-term refinance or a delayed approach may fit better. If the property is titled in your own name and you want the new loan in an LLC, plan the transfer with your attorney. Maine's transfer tax has exemptions for some entity transfers; confirm with your title company.
If you bought within the last year and have made major improvements, gather receipts and permits. Some programs consider documented improvements when the appraised value has risen, though seasoning rules still apply.
A refinance does not change your tax bill, but a citywide revaluation does. If your town has revalued since you bought, use the new assessment in your numbers. Higher taxes lower the DSCR and can limit the cash you can take out.
Insurance also tends to rise on older buildings over time. Get a current quote rather than using last year's premium, since the new payment includes whatever insurance cost the lender sees at closing.
Three things set the limit.
If the ratio comes in tight at 75% LTV, try 70% or 65%. A slightly smaller cash-out can keep the DSCR above 1.0x and still free up meaningful equity. Our DSCR calculator lets you test different loan amounts quickly.
Many owners use cash-out proceeds as the down payment on another rental. If you own five or more properties, a blanket portfolio loan can refinance several at once with one closing and one payment. Either way, keep reserves in mind; older buildings need roofs and boilers on their own schedule.
Before you commit the cash to a new purchase, run the numbers on both properties together. Two buildings with tight ratios leave less room for a vacancy or a winter repair than one comfortable building and a healthy cash reserve.
Selling a long-held Portland building can trigger capital gains tax and transfer tax, and it ends the rental income. A cash-out refinance keeps the building and its income while freeing up equity, though it adds a larger loan payment. Many owners compare the two side by side with their accountant.
If the building has strong rents and modest debt, a cash-out often leaves the DSCR comfortable. If rents are well below market or expenses are high, a smaller cash-out, or a rate-and-term refinance, may be the safer choice.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, your current balance, rents and leases through the form below or call (877) 298-1001. See our Maine DSCR cash-out page for statewide notes.
Up to 75% of appraised value, minus your existing balance and closing costs, as long as the DSCR still meets the program minimum.
No. The loan qualifies on the property rent. We review credit, assets and reserves, not W-2s or tax returns.
It can. Lenders typically use the lower of signed leases and market rent, so below-market leases reduce the qualifying ratio.
Seasoning varies by program. Our seasoning guide covers the common options.
Yes. Leverage on 5-8 unit buildings varies by program and may be lower than on 1-4 units.
Yes. LLC borrowers are standard and you sign for the loan personally.
These are business-purpose loans, so proceeds are generally used for investment purposes such as buying or improving rental property.
Yes, if all owners are on the LLC or title and agree to the loan. The LLC structure is standard on our DSCR programs.
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