In Rapid City, a lot of rentals change hands on seller financing, contract-for-deed arrangements or short-term rehab money. Sooner or later each of those needs a long-term home, and a DSCR rate-and-term refinance is built for that hand-off.
In short: LendingStreet refinances 1-8 unit rentals in the Rapid City area with DSCR rate-and-term loans that pay off seller financing, balloons, hard money, bridge loans or an existing mortgage. Rate-and-term reaches up to 80% LTV on some programs, qualifies on the property's rent with no W-2s or tax returns, and offers 30-year terms. The standard minimum DSCR is 1.0x and the minimum credit score is 620.
Western South Dakota has a long tradition of private and seller-financed deals, especially on older rentals and small buildings. Those arrangements often carry balloon dates. Investors who rehab houses in North Rapid or Robbinsdale with short-term loans also need a long-term loan once tenants are in place.
Rate-and-term also helps owners who simply want a better structure on an existing rental loan, such as a longer amortization that lowers the monthly payment and makes the property easier to hold through vacancies and repairs.
With a contract for deed, the seller keeps title until the buyer pays in full. To refinance, the payoff has to be confirmed and title transferred at closing, which takes coordination with the seller and the title company. Start early, get a written payoff figure, and make sure the contract was recorded or that the title company can work with it.
Seller-financed deals sometimes include a balloon in three to five years with no extension right. Mark the date, and plan the refinance well ahead so the seller does not have to wait and you do not lose the property over a missed deadline.
A rate-and-term refinance pays off what you owe plus closing costs, with little or no cash back. Because no equity is taken out, some programs allow up to 80% LTV, higher than the 75% cash-out limit.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Pays off existing debt | Yes | Yes |
| Cash back | Little or none | Yes |
| Max LTV | Up to 80% on some programs | Up to 75% |
| Qualifies on | Property rent | Property rent |
This example is illustrative and not a quote. An investor bought and rehabbed a side-by-side duplex near Robbinsdale with a short-term loan that now has a $221,000 balance and interest-only payments of about $1,934 a month. The property appraises at $330,000, and both units are leased for a combined $2,500.
The new loan covers the payoff plus about $5,000 in closing costs, or $226,000, about 68% of value. Estimated principal and interest is about $1,542. With taxes of $390 at the non-owner-occupied levy and insurance of $170, the payment is about $2,102 and the DSCR is about 1.19x.
If the ratio comes in tighter than this, options include paying down the loan at closing, waiting until a rent increase takes effect, or looking at a program below 1.0x. We can show each option side by side.
| Item | Amount |
|---|---|
| Current balance | $221,000 |
| Appraised value | $330,000 |
| New loan with closing costs | $226,000 |
| Loan-to-value | 68% |
| New monthly payment | $2,102 |
| DSCR | 1.19x |
Appraisals, title work and lease checks take time, and Black Hills appraisers get busy in summer. Begin the refinance at least a couple of months before a balloon or maturity date. If your current loan has an extension option, know its cost so you are not forced into a rushed decision.
Rapid City appraisers usually find good comparable rents for duplexes and ranches, but unusual properties, like a home with an unpermitted basement apartment, may need more support or may not count the extra unit. Clear that up before you apply.
Unpermitted rehab work can lower the appraisal, so close out permits with the City of Rapid City first. Tax bills that still show an owner-occupied classification will rise to the non-owner-occupied levy, so budget the higher figure. Properties near Rapid Creek may need flood insurance, and roofs with hail history can complicate the insurance binder.
Properties on the Meade County side, such as Black Hawk and Piedmont, use that county's levies. Pull the right parcel record so the tax figure in your payment is accurate.
A complete file keeps the refinance on schedule.
If you are paying off seller financing, include a copy of the note or contract and the recorded documents so title can confirm the payoff.
The best time to plan a rate-and-term refinance is before you buy with short-term money or sign a seller-financed contract. Estimate the after-rehab value, the market rent and the full payment at the non-owner-occupied levy, then confirm the DSCR clears 1.0x at the loan amount you will need.
If the numbers only work at a higher LTV than the program allows, you will need cash at closing. Knowing that early lets you adjust your offer, your rehab or your financing before you commit.
Many Rapid City investors repeat the same cycle: buy and rehab with short-term money, lease the property, refinance into a long-term DSCR loan and move on to the next one. Each round is easier when the refinance is planned from the start.
Tell us the payoff date and amount, and we will build the timeline backward from it.
Get a quote with the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. See our South Dakota rate-and-term page for statewide notes.
Yes. A DSCR rate-and-term refinance can pay off the contract and transfer title at closing, as long as the rent covers the new payment.
Up to 80% on some rate-and-term programs. Larger balances and 5-8 unit buildings can have lower limits.
No. The loan qualifies on the property's rent and the full payment.
Seasoning rules vary by program. Some use the new appraised value soon after the work; others use cost basis for a period.
Yes, on STR programs where the nightly use is licensed and allowed.
Programs below 1.0x exist for properties that fall a little short.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Many close in a few weeks once the appraisal, title, leases and insurance are in place. Summer appraisal backlogs can add time.
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