Owners of Black Hills cabins and Rapid City rentals have watched values climb as people moved to western South Dakota. A DSCR cash-out refinance lets you use that equity for the next deal without sharing your tax returns.
In short: LendingStreet offers DSCR cash-out refinances up to 75% LTV on 1-8 unit rentals in Rapid City and the Black Hills, qualified on the property's rent, or on some programs its short-term rental income, rather than your personal income. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Seasoning rules vary by program.
Most cash-out files here fall into two groups. The first is long-term rentals in town: duplexes in North Rapid, ranches in Robbinsdale and newer homes in Box Elder, leased on 12-month terms. The second is vacation rentals in the hills around Hill City, Keystone, Custer and the Sheridan Lake area, which qualify on short-term rental income on some programs.
Owners also use cash-out on small multi-unit buildings near downtown and South Dakota Mines, where combined rent of all units supports the new payment. Whatever the property, the refinance has to stand on its own income.
| Property type | Income used | Main question |
|---|---|---|
| In-town long-term rental | Leases or market rent | Is rent at market? |
| Black Hills vacation rental | Short-term rental income on some programs | Is the use licensed and allowed? |
| Small multi-unit | Combined rent of all units | Vacancies and turnover |
For a cabin or vacation home, the income side depends on the program. Some use your booking history, others a third-party projection. Either way, the property needs to be legally operating: a South Dakota lodging license, sales and tourism tax filings, and local zoning or permit approval where required.
Because Black Hills bookings peak in summer and around the Sturgis rally, annual income matters more than a strong July. Have twelve months of statements ready if you have them.
If the cabin is new to nightly rentals and has little booking history, a third-party projection may be the starting figure. Projections that look high next to similar licensed cabins nearby are often adjusted, so build your plan around a conservative number.
This example is illustrative and not a quote. An investor owns a licensed vacation cabin near Keystone valued at $640,000, with $268,000 left on the current loan. Based on its booking history, the program uses qualifying income of $5,400 a month. Taxes are $700 a month and insurance, including wildfire coverage, is $330.
At 75% LTV the new loan is $480,000, estimated principal and interest is about $3,274, and the payment is about $4,304 for a DSCR of about 1.25x. After paying off $268,000 and about $9,800 in closing costs, the investor nets about $202,200. At 70% LTV the loan is $448,000, the ratio is about 1.32x and the net is about $170,200.
Notice that the difference in cash between the two leverage levels is modest compared with the change in the ratio. For a seasonal property, a stronger ratio gives more room in a slow winter or a rainy summer.
Your result depends on actual booking history, the tax bill on that parcel and the current insurance quote.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| New loan | $480,000 | $448,000 |
| Payoff | $268,000 | $268,000 |
| Closing costs | $9,800 | $9,800 |
| Estimated cash to investor | $202,200 | $170,200 |
| Total monthly payment | $4,304 | $4,086 |
| DSCR | 1.25x | 1.32x |
Insurers in the Black Hills ask about wildfire exposure, roof condition and hail history. A renewal that jumps sharply raises your payment and lowers the ratio, so get a current quote before you refinance. For in-town rentals near Rapid Creek, confirm the flood zone.
Some owners have also seen insurers non-renew policies on forest-edge homes. If that has happened to you, line up replacement coverage before you apply, because a lapse in coverage will stop a refinance.
If you bought or rebuilt recently, seasoning rules decide whether we use the new appraised value or your cost basis. They vary by program. If you paid cash for a cabin, ask about delayed financing options.
If you are refinancing an in-town rental you bought recently with a short-term loan, see our Rapid City rate-and-term page as well; paying off the loan without cash back can allow higher leverage on some programs.
Appraisers in the Black Hills compare your property with sales of similar cabins and homes, which can be far apart. Unique features like acreage, outbuildings, private roads or wells can make comparable sales harder to find. Property-type and acreage limits vary by program, so mention them up front.
Recently added bedrooms, bathrooms or a finished basement that raise guest capacity should be permitted. Unpermitted space may not count in the appraisal, and it can raise questions with the insurer.
Common uses are the down payment on another rental, a renovation that raises nightly or monthly rent, or paying off higher-cost short-term debt. Make sure the property you are refinancing can carry its new payment through the slow season on its own.
Many owners in the hills use cash-out to fund a second cabin or to add amenities like a hot tub or improved outdoor space that support higher nightly rates. Run the numbers on the new property before you spend the cash, so both properties carry their own payments.
Send the address, value estimate, current loan and income history through the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. See our South Dakota cash-out page for statewide notes.
If you own several rentals, mention them too; a blanket loan may let you tap equity across the group in one closing.
Yes, on some programs that use short-term rental income, as long as the property is licensed and the nightly use is allowed.
Up to 75% of the appraised value, less your current loan and closing costs, if the income covers the new payment at the program minimum.
No. The loan qualifies on the property's income compared with the full payment.
It can. Programs look at annual income or projections, not just peak months.
That is common in the hills. Expect questions about them, and note that property-type limits vary by program.
Yes. In-town rentals qualify on leases or market rent like any DSCR loan.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Yes. Duplexes and other 1-8 unit rentals in town qualify on lease income, as long as the rent covers the new payment at the program minimum.
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