Plenty of Rochester investors bought doubles years ago for very little and now own them free and clear or close to it. That equity can fund the next purchase without touching your personal income documents.
In short: LendingStreet offers DSCR cash-out refinances on 1-8 unit rentals in Rochester and Monroe County up to 75% LTV, qualified on the property's rent, not your tax returns. Loans start at $150,000, the standard minimum DSCR is 1.0x after the new payment, and LLC owners are standard. In New York, budget for the mortgage recording tax on the new loan and check the latest assessment before you size the cash-out.
Rents across Rochester's doubles and small buildings have climbed, and values have followed. Owners who paid cash at an auction, used a short-term loan or have paid down an older mortgage often have more equity than they need tied up in one house.
Because Rochester purchase prices are modest, the cash from one refinance can be enough for the down payment and repairs on another double, which is how many local investors grow from one or two properties to a small portfolio.
Cash-out goes up to 75% LTV on 1-4 unit rentals. For five to eight units, max LTV can be lower and varies by program. Seasoning rules, meaning how long you must have owned the property, vary by program too.
The other limit is the ratio. The new, larger payment still has to be covered by the rent. On Rochester doubles with solid rents, the ratio usually holds up; on a building with below-market leases, it may limit the loan.
Keep in mind the $150,000 minimum loan. On a lower-valued single-family home, 75% of the value may fall under that minimum, so cash-out tends to work best on doubles, small buildings and higher-value suburban rentals.
This example is illustrative and not a quote. An owner has a two-family house appraised at $230,000 with a remaining balance of $60,000. The units rent for $1,300 and $1,250, for $2,550 a month. Taxes are $480 a month and insurance is $170.
The table shows three loan sizes. Closing costs and mortgage recording tax are estimated at $7,500. At 75% LTV the new loan is $172,500, the owner nets about $105,000 before any other costs, and the payment with taxes and insurance is about $1,827, a DSCR of about 1.40x.
| LTV | New loan | Est. net cash | Monthly payment with T&I | DSCR |
|---|---|---|---|---|
| 65% | $149,500 | $82,000 | $1,670 | About 1.53x |
| 70% | $161,000 | $93,500 | $1,748 | About 1.46x |
| 75% | $172,500 | $105,000 | $1,827 | About 1.40x |
New York taxes the amount of the mortgage when it is recorded, and on a cash-out refinance the new loan amount is what gets taxed. That makes the tax a real line in the closing costs. In some refinances, a consolidation, extension and modification agreement, known as a CEMA, can limit the tax to the new money; whether that is possible depends on the program and the existing lender.
Your closing attorney can estimate the tax and the rest of your closing costs before you lock in a loan size.
Remember that the recording tax, title insurance and attorney fees come out of the loan proceeds, so the cash you receive will be less than the difference between the new loan and the old balance. The example table includes an estimate for that reason.
Your DSCR is calculated on the current tax bill. If the city or your town has recently reassessed, or will soon, your taxes may rise after the refinance. Look at the most recent assessment notice and budget for any increase so the ratio still works next year.
Suburban school tax bills arrive in the fall, separately from the town and county bill, so make sure both are counted. Missing the school bill is one of the most common reasons a Monroe County ratio comes in lower than an owner expects.
The appraiser will look at the house. Peeling paint, a failing porch or an old roof can lower the value or lead to repair requirements. In the city, an expired certificate of occupancy or open code violations should be cleared first. A modest repair before the appraisal can raise the cash you get.
Rochester appraisers will compare your property with recent sales of similar doubles nearby. If your renovation is well above the neighborhood standard, the value may not rise as much as the money you spent.
Before you take the maximum, think about what the money is for. If you plan to buy another double, figure out the down payment, closing costs, repairs and reserves you will need, then size the cash-out to match. Taking less can leave you with a stronger ratio and a lower payment on the property you already own.
Lenders on your next purchase will also look at your reserves, so keeping some of the cash in the bank, rather than spending all of it, can help you qualify.
If you own five or more rentals, a blanket portfolio loan can refinance them together with one closing and one payment, qualified on portfolio cash flow, with release provisions when you sell a property.
Send the address, current balance, rents and tax bill through the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. We will show you the cash available at a few loan sizes.
If you also own rentals elsewhere in New York, mention them. We can look at a single property or several at once.
Up to 75% LTV on 1-4 units, with lower limits on some 5-8 unit and larger loans. The rent must still cover the new payment.
No. The loan qualifies on the property's rent, not your W-2s or tax returns.
Seasoning varies by program. See our cash-out seasoning guide for details.
Yes. The mortgage recording tax applies to the new loan amount, and a CEMA may reduce it in some cases. Ask your attorney for an estimate.
Yes. With no existing balance, the full loan amount, less closing costs, comes to you.
We use the current bill. A higher tax bill lowers the DSCR and can reduce the loan size.
Yes. LLC borrowers are standard.
The loan is a business-purpose loan, so the cash is typically used for investment purposes such as buying or repairing rental property.
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