Can I refinance before the rehab is finished?

No. The property needs to be rent-ready or leased, because the DSCR test requires a rent figure — a mid-gut property has none.

Does the appraiser see the rehab or the original condition?

The appraiser inspects the current, post-rehab condition and comps it against similar renovated properties.

What if my rehab cost more than I can document?

Only documented, receipted improvements count toward cost basis; undocumented spend is effectively invisible to the seasoning calculation.

Can I use a rent estimate instead of a signed lease?

Yes, via the appraiser's rent schedule, though a signed lease is generally stronger evidence and may support a marginally higher figure.

Should I size the exit loan before I buy?

Yes. Running the DSCR sizing on the projected post-rehab rent and value before purchase tells you whether the capital actually recycles.

LESSON 3 OF 65 MIN READ

The BRRRR refinance, step by step

The refinance is the step that makes BRRRR work: buy with cash or a bridge loan, renovate, place a tenant, then refinance onto a thirty-year DSCR loan sized off the improved appraised value rather than the purchase price. The mechanics depend on seasoning — under six months on title the loan is generally sized off documented cost basis, and at six months and beyond the appraised value governs, with practice varying by lender in between. Most files stall not on the DSCR calculation but on rent evidence and the improvement paper trail, so building both while the rehab is still underway is what keeps the timeline intact.

THE NUMBERS

Minimum DSCR	0.75 (0.75–0.99 prices at +62.5 bps, 70% LTV cap)
Maximum LTV	80% purchase or rate-and-term · 75% cash-out
FICO floor	660 (below that the desk does not lend)
Loan size	$100K – $3M single · $10M portfolio
Reserves	6 months PITIA · 12 months on a portfolio
Prepay options	5-4-3-2-1 par · 3-2-1 +25 bps · 1-yr +50 bps · none +87.5 bps
Typical days to close	21–30 days from a signed term sheet
Rate sheet	Silt Rate Desk — Market Composite Sept 2026 · effective 2026-09-01

ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.

What does the full timeline actually look like?

Purchase closes, usually with a hard-money or bridge loan or with cash. Rehab runs for a period the investor controls, ideally with contractor invoices and permits filed as the work happens rather than reconstructed afterward. A tenant moves in and signs a lease, or the unit is held rent-ready for the appraiser's rent schedule. The refinance application opens once the lease is signed or the unit is rent-ready, targeting the six-month seasoning mark if a full appraised-value cash-out is the goal.

Why does the six-month mark matter so much?

Before six months on title, the new loan is typically sized against your documented cost basis — purchase price plus receipted improvements — rather than the post-rehab appraisal, which caps how much capital comes back out. At six months, most of the market including Silt will size against the full appraised value, and by twelve months that is close to universal regardless of lender. An investor targeting maximum capital recycling times the refinance application to land right at that six-month threshold rather than sooner.

What rent evidence does the file actually need?

A signed lease at or near market rent is the strongest evidence and the fastest path through underwriting. If the unit is still vacant at the point of refinancing, the appraiser's Form 1007 rent schedule stands in for a lease, usually with a modest haircut versus a signed lease's face amount. Either way, the rent figure used in the DSCR calculation is the lower of the lease and the appraiser's market estimate, so an above-market lease to a related party will not move the number.

What is the improvement paper trail, and why build it during the rehab?

The underwriter reconciles a line-item improvement schedule against contractor invoices, matching bank or card payments, and permits where the jurisdiction required them, to establish the cost basis if the file refinances before full seasoning. Investors who save every invoice and permit as the rehab happens can hand over a reconciled schedule on day one of the refinance; investors who try to reconstruct it from memory after the fact routinely lose two to three weeks to document chasing. Cosmetic work without receipts, or work paid in cash, generally will not be credited to basis.

Where do BRRRR refinances actually stall?

Three places, in order of frequency: rent evidence that is late or missing because the lease was never formalised, an improvement schedule that does not reconcile to bank records, and an appraisal that comes in below the investor's expectation because comparable sales lag a hot renovation market. None of these are DSCR problems — they are documentation and timing problems — which is exactly why they are avoidable with preparation that starts during the rehab, not after it.

How does the exit loan compare with the bridge it replaces?

The DSCR takeout is a thirty-year loan, fixed or interest-only for the first ten years, at rates well below a bridge or hard-money note, with a prepayment structure chosen from a published menu rather than the short, expensive term of a rehab loan. Running the DSCR sizing before the purchase — not after the rehab — tells you up front how much capital the refinance will actually return, which is the number that determines whether the deal recycles cleanly or leaves capital trapped.

A BRRRR duplex, purchase to refinance

Purchase price	$220,000, cash
Rehab cost, documented	$45,000
Total cost basis	$265,000
Time to lease-up	4 months
Refinance application opens	Month 5, targeting 6-month seasoning
Post-rehab appraised value	$340,000
Refinance loan — 75% of appraised value	$255,000
Capital returned toward $265,000 basis	Roughly $255,000, before closing costs
Result	Most of the invested capital recycled into the next deal

Illustrative figures assuming the six-month appraised-value standard applies; earlier refinances may size to cost basis instead. Not a quote or commitment to lend.

WHAT WE NEED FROM YOU

Purchase closing statement. Establishes the starting cost basis and the deed date that starts the seasoning clock.
Improvement schedule with invoices. Line-item, reconciled to bank or card payments, with permits where required.
Signed lease or rent-ready evidence. The lower of the lease and the appraiser's market rent qualifies the loan.
Entity documents. The refinance, like the purchase, closes in the borrowing entity's name.
Insurance binder. Reflecting the completed rehab, not the pre-renovation policy.

FREQUENT QUESTIONS

Can I refinance before the rehab is finished?: No. The property needs to be rent-ready or leased, because the DSCR test requires a rent figure — a mid-gut property has none.
Does the appraiser see the rehab or the original condition?: The appraiser inspects the current, post-rehab condition and comps it against similar renovated properties.
What if my rehab cost more than I can document?: Only documented, receipted improvements count toward cost basis; undocumented spend is effectively invisible to the seasoning calculation.
Can I use a rent estimate instead of a signed lease?: Yes, via the appraiser's rent schedule, though a signed lease is generally stronger evidence and may support a marginally higher figure.
Should I size the exit loan before I buy?: Yes. Running the DSCR sizing on the projected post-rehab rent and value before purchase tells you whether the capital actually recycles.

Apply

Cash-out refinance seasoning Rate-and-term vs cash-out Academy tools All answers