The Quick Read: It depends on your payoff, because 75% caps the whole new loan rather than the cash you receive; cash equals appraised value times 75%, minus the hard money payoff, minus closing costs, so a payoff near 60% of value leaves roughly 15% of value before costs.
- 75% is a ceiling on the new loan. It is not the share of value paid to you.
- The 75% cash-out ceiling belongs to the DSCR loan that pays off your hard money. Hard money lenders’ own cash-out and rate-and-term refinances run up to 65% of value, and that varies by lender, property, and experience.
- Your payoff includes principal, accrued interest, and any exit or extension fees.
- Because your payoff stays fixed, each point the appraisal misses removes about three-quarters of a point of loan, and that reduction comes straight out of your cash.
- Cash stops when payoff plus costs reaches 75% of value.
Which 75% Are We Talking About?
One is a hard money lender refinancing you into a new short-term loan with cash back. The other is a long-term DSCR loan that pays off your hard money note and returns the extra to you.
DSCR stands for debt service coverage ratio. It compares the property’s rent to its full monthly obligation: principal, interest, taxes, insurance, and any HOA dues (together, PITIA). A loan underwritten this way qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
The 75% question belongs to the second case. Across Lendmire’s wholesale network, DSCR cash-out refinances top out at 75% loan-to-value (LTV) on an investment property. LTV is the new loan divided by the appraised value. A hard money lender doing its own cash-out or rate-and-term refinance sits lower, up to 65% of value, with terms of 6 to 18 months, interest-only, and no prepayment penalty. Those hard money figures vary by lender, property, and experience.
Many investors use hard money to buy and fix, then refinance out into long-term financing once the property is stabilized. Lendmire brokers that path through its hard money exit refinance program, subject to lender guidelines.
The Formula for Cash Out
Here is the whole calculation in one line:
Cash out = (appraised value × 75%) − hard money payoff − new-loan closing costs
BiggerPockets investors describe the same refinance math: post-rehab appraised value times 75%, minus the loan balance. Three pieces matter.
Appraised value. This is what the refinance appraiser says the property is worth today. It is not your projected after-repair value (ARV). It is not your purchase price plus rehab.
Hard money payoff. This comes from a payoff statement. It shows principal, accrued interest, exit or extension fees, and per-diem interest, which is the daily interest that keeps accruing until the wire lands.
Closing costs. Cash-out refinances carry real closing costs. Credit Karma notes closing costs on a cash-out refinance can run up to 6% of the loan. Costs come straight off your proceeds.
A Worked Example (Percentages, Not Dollars)
Run the numbers on an index of 100, meaning the appraised value equals 100. These are modeled assumptions, not market data.
- Appraised value: 100.
- New loan at the 75% cap: 75.
- Hard money payoff, all-in: 60.
- Gross cash before costs: 15.
- Closing costs, modeled at 3% of value: 3.
- Net cash to you: 12.
So at 75% LTV, you net about 12% of the property’s value, not 75%. Multiply that percentage by your own appraised value, or use the calculator on this page for an illustrative estimate. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The calculation also tells you when cash disappears. Payoff plus costs must stay below 75% of value. Put another way, the appraisal must come in above about 133% of payoff plus costs (1 ÷ 0.75). Miss that, and nothing comes back.
How Net Cash Changes With Your Payoff
The more of the value your hard money loan already consumes, the smaller your check. This table holds the appraisal at 100 and the costs at a modeled 3.
| Payoff (% of value) | Gross cash | Net after costs |
|---|---|---|
| 50 | 25 | 22 |
| 60 | 15 | 12 |
| 70 | 5 | 2 |
| 72 | 3 | 0 |
| 75 | 0 | Cash needed at closing: 3 |
Two rows deserve attention. At a 72 payoff, the deal clears with zero cash to you. At 75, you are bringing money to the table just to pay off the old lender and cover costs.
What a Low Appraisal Does to Your Check
This is where most BRRRR-style plans get hurt. Hold the payoff fixed at 60 and cut the appraisal below your expected value of 100.
| Appraisal vs. expected | New loan at 75% | Gross cash | Net after 3 costs |
|---|---|---|---|
| 100 | 75.00 | 15.00 | 12.00 |
| 95 | 71.25 | 11.25 | 8.25 |
| 90 | 67.50 | 7.50 | 4.50 |
| 85 | 63.75 | 3.75 | 0.75 |
A 5% miss on value drops net cash by nearly a third in this example. A 15% miss nearly erases it. The effect is outsized because your payoff does not shrink when the appraisal does.
One BiggerPockets contributor warns that refinance appraisers run very conservative, so investors should be conservative on ARV. The same thread suggests buying at roughly 70% of ARV minus repairs. Stress-test your exit with the appraisal 5% to 10% below your estimate. If the deal still works, good. If not, rework it before the hard money note matures.
For rent coverage, the appraiser completes a rent schedule. Under Fannie Mae’s published appraisal forms, that is Form 1007 for one-unit properties and Form 1025 for two- to four-unit properties. Those are the form names only. DSCR programs set their own rules.
The Rent Test Runs Alongside the Equity Test
Value gets you cash. Rent gets you approved. A bigger loan means a bigger monthly obligation, so the coverage ratio drops as you pull more out.
Many DSCR programs in the network start at 1.00 coverage. That is a floor for select programs, not a universal standard. Stronger ratios open better pricing and higher leverage. A separate select-lender path goes below 1.00, with leverage and terms adjusted. Either way, the strongest files clear both tests: enough equity and enough rental coverage.
One caution. Clearing 1.00 does not mean positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A property can show good coverage and still cost you money every month.
A property can also have the value to support cash-out and lack the rent to carry the loan. When that happens, the lender sizes the loan down to what the rent supports, and the cash shrinks with it.
What Can Shrink Your Number Further
Beyond the payoff and costs, five things reduce proceeds.
1. Seasoning. Seasoning is the waiting period between buying a property and refinancing it with cash back. In the network, a DSCR cash-out generally expects about six months of ownership, measured from title recording. A new lender sees the recorded hard money lien and applies its own clock. Inside that window, lenders commonly size to the lower of appraised value or your cost basis (purchase plus documented rehab). That can leave the new loan below your payoff.
2. Cost basis limits. Even after seasoning, a lender may look at what you actually paid and spent. Documented receipts matter.
3. Junior liens. The 75% ceiling applies to the loan being placed. Any other lien on the property has to be paid off in the same transaction or it eats into the same equity.
4. Holdbacks and unfinished work. If the property has open repairs, the appraiser values it as-is, which can be well below your ARV.
5. Credit and reserves. A 620 credit score is the floor in parts of the network. Most programs want around 660, and 700 or higher unlocks the strongest leverage tiers. Reserves, meaning cash left in the bank after closing, commonly run about six months of PITIA, stepping up to about nine months on loans above $1,500,000. Reserves vary by lender, leverage, and loan size.
Proceeds paid to an LLC need entity documentation, subject to lender program eligibility.
Hard Money vs. DSCR Exit: Side by Side
Here is how the two loans differ on the figures that drive your check. All figures are program ranges that vary by lender, property, and experience, and none is a commitment to lend.
| Factor | Hard money refinance | DSCR cash-out refinance |
|---|---|---|
| Cash-out ceiling | Up to 65% of value | Up to 75% LTV |
| Term | 6-18 months, interest-only | Long-term; 30-year fixed is the spine |
| Rent test | Asset-based review | Rent vs. PITIA, 1.00 on select programs |
| Credit floor | 620, extra conditions under 660 | 620 floor; most want about 660 |
| Seasoning | Varies by lender | About 6 months from title recording |
The gap between 65% and 75% is why many investors treat hard money as a bridge and the DSCR loan as the destination. Ten points of value is a meaningful difference on your check.
When It Works and When It Fails
A hard money payoff through a DSCR cash-out works when the numbers clear a few tests at once.
- Equity. Payoff plus costs sits comfortably under 75% of a conservative appraisal.
- Rent. The property covers the larger loan’s full PITIA at a ratio the program accepts.
- Seasoning. You have owned long enough for the lender to size on appraised value instead of cost.
It fails in these situations:
- You bought at a price near your ARV, so payoff already runs near 75% of value.
- The appraisal comes in low and your payoff does not move.
- The rent supports a smaller loan than the equity does.
- The hard money note is about to mature and you are still inside the seasoning window.
That last one is the real danger. Hard money terms run 6 to 18 months, so the maturity date does not wait for your seasoning period. If you are close, a payoff-only refinance now and a cash-out later, on a fresh appraisal, can be cleaner than forcing it. That is a strategy to price with your lender, not a rule. Lendmire covers the early-ownership version of this problem in its piece How Much Cash Comes Out of a Hard Money Cash-Out Refinance With No Title Seasoning at All?.
Delayed Financing: The Cash Buyer Exception
If you paid cash and want it back, some programs allow a cash-out refinance sized to your documented purchase cost instead of waiting out seasoning. The key word is documented: the new loan is capped at your initial investment plus financed costs. A purchase funded by hard money generally does not fit, because a mortgage is already on the property. Each program sets its own version, so confirm yours with a broker before you plan around it.
Moving From Rate-and-Term to Cash-Out
Classification matters. If the new loan only covers your payoff plus costs, it is a rate-and-term refinance. If any cash comes back, it is cash-out, and the cash-out ceiling applies. On the DSCR side, rate-and-term loans can run to 85% LTV with no cash back, versus the 75% cash-out cap. That distinction is why a payoff-only refinance can sometimes be sized higher than a cash-out on the same property.
Walking away with even a small amount of cash converts the whole transaction. Plan the structure on purpose, not by accident.
Sizing Your Own Number: A Short Checklist
1. Get a conservative value estimate, below your ARV, then discount it again for the appraisal.
2. Multiply by 75% for the DSCR cash-out ceiling.
3. Pull a current hard money payoff statement, including per-diem interest.
4. Subtract the payoff.
5. Subtract closing costs. Use a cushion, not the low end.
6. Confirm the rent covers the larger loan at the coverage ratio your program wants.
7. Check seasoning and reserves.
8. Repeat the math with the appraisal 5% and 10% lower.
The balance after step five is your gross-to-net number. Steps six through eight tell you whether it is real.
Key Terms Defined
Loan-to-value (LTV): The new loan amount divided by the property’s appraised value.
Payoff: The exact amount needed to retire the existing loan, including principal, accrued interest, and exit fees.
Gross cash-out: The new loan minus the payoff, before closing costs.
Net cash-out: What actually reaches you after the payoff and all closing costs.
Seasoning: The waiting period a lender wants between buying a property and refinancing it with cash back.
Reserves: Liquid funds you keep after closing, usually counted in months of PITIA.
Frequently Asked Questions
Does 75% LTV mean I get 75% of my property’s value in cash?
No. It is the maximum size of the new loan, and your cash is what remains after the old loan is paid and costs are covered. If your payoff already uses most of the value, little or nothing comes back. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
What is the most a hard money lender will refinance on its own?
Up to 65% of value on cash-out and rate-and-term refinances in the program Lendmire places, varying by lender, property, and experience. Fix-and-flip purchases are sized on project cost, capped at 75% of after-repair value. These are different measures, so do not compare them directly to a DSCR cash-out ceiling.
What happens if my appraisal comes in low?
Your loan shrinks by about 75 cents for every dollar of lost value, and your payoff stays the same. Your cash drops by that full amount. If payoff plus costs exceeds 75% of value, you would need to bring money to close.
Do I need to wait before refinancing out of hard money?
For a DSCR cash-out, about six months of ownership from title recording is the common expectation in the network. Inside that window, lenders often size to the lower of value or cost basis. Rate-and-term refinances follow different rules.
Can I do this inside an LLC?
Often yes, subject to lender program eligibility. Expect entity documents, and expect the lender to review the property and borrower the same way. Ask before closing which entity will take title and receive proceeds.
Where to Go Next
Cash-out math rewards doing the arithmetic before you commit to a purchase price, not after. For the full picture on how these loans are structured, see Lendmire’s complete DSCR loans guide.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire is a mortgage broker arranging DSCR financing through select lenders across 41 markets, including Washington, D.C. Programs vary, every file is underwritten individually, and nothing here is a commitment to lend.
An investor who buys with the exit appraisal in mind, not the dream ARV, is usually the one who sees real cash at the end.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
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References
1. BiggerPockets – BRRR thread
2. Credit Karma – Cash-out refinance on an investment property
3. Fannie Mae Selling Guide B4-1.2-01
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: 5 DSCR Cash-Out Refinance Options When the Hard Money Loan on a Rental Needs a Refinance · DSCR Cash-Out Refinance When Comparing a Portfolio Loan to a Conventional Mortgage · 5 DSCR Cash-Out Refinance Options When the Bridge Loan Is Coming Due on a Rental
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.