Refinance a Rental to Get Cash IN TENNESSEE NOW

Refinance a Rental Property to Get Cash: An Investor’s Guide for Tennessee

NASHVILLE, TN – AUGUST 13, 2025: As a real estate investor in Tennessee, you’ve witnessed firsthand the incredible growth across the state, from the booming tourism of Nashville’s music scene to the logistics hub of Memphis and the tech-driven expansion of Chattanooga. This growth has fueled property appreciation, and you’ve likely built substantial equity in your portfolio. The question now is: how do you strategically access that cash to fuel your next deal? The answer lies in a powerful financial tool: a cash-out refinance.

This guide will walk you through how to refinance a rental property to get cash, with a specific focus on alternative financing options that are designed for the modern investor, not the traditional homeowner.

Refinance a Rental Property to Get Cash:

The Cash-Out Refinance: Your Key to Unlocking Equity

A cash-out refinance is a type of mortgage that allows you to replace your current loan with a new, larger one. The difference between the new loan amount and your existing mortgage balance is paid to you in cash. This is a highly effective way to convert the equity you’ve built into liquid capital, which you can then use for:

• Acquiring a new property: Whether it’s a duplex in the revitalized Germantown neighborhood of Nashville (37208) or a single-family home in the fast-growing Memphis suburb of Cordova (38016), cash is king in a competitive market.
• Funding renovations: Use the capital to rehab a property in the up-and-coming areas of Chattanooga’s Northshore (37405) to increase its value and rental income.
• Paying down higher-interest debt: Optimize your overall financial position by consolidating more expensive loans.

For real estate investors, the most efficient way to achieve this is through specialized, alternative financing options that bypass the limitations of conventional banks.

The Alternative Financing Advantage: DSCR Loans

Traditional lenders scrutinize your personal income via W2s and tax returns, which can be a roadblock for entrepreneurs and portfolio investors. Alternative financing, such as DSCR loans, eliminates this problem entirely.

DSCR stands for Debt Service Coverage Ratio, and it’s the metric a lender uses to evaluate a property’s financial health. The formula is simple and elegant:

DSCR = Gross Rental Income / Total Debt Service (PITI)

A DSCR of 1.0 means the property’s income is equal to its expenses. A higher ratio, such as 1.20 or more, demonstrates a profitable, low-risk asset. For an investor, this means your ability to get a loan is based on the performance of your property, not on your personal debt-to-income ratio.

This is a unique selling proposition for investors in cities like Knoxville (37902) and Franklin (37064) who may have a strong portfolio of rental properties but are continually reinvesting capital, making their personal tax returns appear less appealing to traditional lenders.

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

Start Quiz

Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

Ready to send

Please provide your contact information to proceed.

Email Address *

First Name *

Consent *

Yes, I agree with the privacy policy and terms and conditions.

Submit

Current Market Insights and Loan Requirements (as of August 13, 2025)

The Tennessee housing market remains strong, with consistent growth in home prices and a steady influx of new residents. Here’s a look at what to expect for alternative financing today:

• Current Rates: As of today, August 13, 2025, interest rates for cash-out DSCR loans are generally in the range of 7.00% to 8.50%. These rates can vary based on several factors:
  • Loan-to-Value (LTV): The lower your LTV (the more equity you have in the property), the more competitive your rate.
  • Credit Score: While a W2 is not required, your credit score is still a factor, with higher scores (720+) receiving the best terms.
  • DSCR Ratio: A higher DSCR ratio, indicating a stronger cash-flowing property, will help you secure a lower rate.
• Requirements: Alternative financing is known for its streamlined and investor-friendly requirements:
  • No Personal Income Verification: Lenders focus on the property’s income, not your personal tax returns.
  • Entity-Based Lending: These loans are typically made to LLCs or other business entities, which helps protect your personal assets.
  • Property Types: Lenders are flexible and can finance a wide range of rental properties, including single-family homes, townhomes, condos, and multi-family properties up to four units.

GHC Funding: Your Tennessee-Focused Lending Partner

To navigate the intricacies of the Tennessee real estate market, you need a lender who offers more than just capital—you need a partner who provides solutions. GHC Funding specializes in empowering real estate investors with a full suite of financing options.

GHC Funding offers not only DSCR Loans but also SBA 7a loans, SBA 504 Loans, Bridge Loans, and other forms of Alternative Real Estate Financing. Their underwriting team understands the nuances of local markets, from the fast-paced growth of Nashville’s Gulch district to the stable returns of long-term rentals in Murfreesboro. Their flexible approach and streamlined process make it easier for you to get the cash you need, when you need it, so you can focus on what you do best: finding and managing profitable properties.

Frequently Asked Questions About Cash-Out Refinancing

• Q1: What is the maximum I can get in cash from a refinance?The amount of cash you can get depends on the property’s value, your current mortgage balance, and the lender’s LTV limits. Most cash-out refinances for investment properties are capped at around 75% of the property’s appraised value.
• Q2: Is a cash-out refinance a good idea if I want to buy another property?Yes, it is one of the most common and effective ways for investors to get cash for a down payment or full purchase of a new property without selling an existing one.
• Q3: Can I get a cash-out refinance on a property with a low DSCR?If the DSCR is too low, it may be difficult to qualify. However, some lenders may still be willing to lend if you have a strong credit score and significant equity.
• Q4: Will a cash-out refinance impact my personal debt-to-income (DTI) ratio?With a DSCR loan, the new loan is underwritten based on the property’s income, so it typically does not impact your personal DTI, allowing you to secure more financing.
• Q5: What are the main costs associated with a cash-out refinance?Costs typically include an appraisal fee, loan origination fees, title insurance, and other closing costs.
• Q6: Can I use the cash from a refinance to pay off a Bridge Loan?Yes, a cash-out refinance is often used as a long-term financing solution to pay off a short-term Bridge Loan after a property has been renovated and stabilized.

Quiz on Tennessee Rental Property Laws

This quiz is designed to test your knowledge of the essential laws and regulations for owning and managing a Tennessee rental property. Understanding these rules is crucial for protecting your investment and ensuring a smooth tenancy.

Page 1 of 5

What is a landlord's primary duty to maintain a Tennessee rental property? A) The landlord is only responsible for major structural repairs, and the tenant is responsible for everything else. B) The landlord's duty is to keep a Tennessee rental property in a "fit and habitable" condition, meeting all building and housing codes, and making all repairs to maintain the property. C) The landlord is not responsible for any repairs, which are the tenant's responsibility. D) The landlord's only duty is to ensure the tenant has access to water and electricity.

Page 2 of 5

What is the legal timeframe for a landlord to return a security deposit after a tenant moves out of a Tennessee rental property? A) A landlord has 60 days to return the deposit. B) A landlord must return the security deposit within 30 days of the tenant vacating the Tennessee rental property, or provide a written, itemized list of deductions. C) A landlord has 15 days to return the deposit. D) A landlord can hold the deposit for as long as they need to assess damages.

Page 3 of 5

Which of the following describes a landlord's right of entry into a Tennessee rental property? A) Landlords can enter at any time without notice. B) Landlords must provide at least 24 hours' notice before entering, except in an emergency, which is a key legal requirement for a Tennessee rental property. C) Landlords must provide at least 48 hours' notice for entry. D) Landlords can only enter the property with the tenant's explicit, written permission for each visit.

Page 4 of 5

What is the legal process for evicting a tenant from a Tennessee rental property for non-payment of rent? A) The landlord can change the locks immediately after rent is late. B) The landlord must provide the tenant with a 14-day notice to pay rent or vacate the premises before filing for eviction, which is the official legal procedure for a Tennessee rental property. C) The landlord must give 30 days' notice before filing for eviction. D) The landlord can shut off the utilities to force the tenant to move out.

Page 5 of 5

What is the maximum late fee a landlord can charge for a Tennessee rental property? A) A late fee for a Tennessee rental property cannot exceed 10% of the rent. B) There is no legal limit on late fees, allowing landlords to set their own policies. C) The late fee can be up to 5% of the monthly rent. D) Landlords are prohibited from charging late fees for any reason.

Please provide your contact information to proceed.

Email Address *

First Name *

Consent *

Yes, I agree with the privacy policy and terms and conditions.

Start Quiz

Helpful Resources for Tennessee Real Estate Investors

To stay ahead in the Tennessee market, it’s crucial to connect with local resources and stay informed. Here are some valuable links:

• Tennessee Real Estate Investors Association (TNREIA): A great resource for networking and education for investors across the state.
• Tennessee Real Estate Commission (TREC): The official state regulatory body for real estate, providing valuable information on laws and regulations.
• Tennessee Housing Development Agency (THDA) Research and Reports: Access detailed data on the state’s housing market to inform your investment decisions.

Take Control of Your Portfolio Today

Don’t let the equity in your Tennessee properties sit idle. A strategic refinance is the key to unlocking the capital you need to make your next move.

To explore your options and find the perfect loan product for your unique needs, visit www.ghcfunding.com. You can also call GHC Funding at 833-572-4327 to speak with an expert who can help you secure the financing you need to grow your Tennessee real estate empire.

Take Control of Your Portfolio Today

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

At GHC Funding, we are commercial finance specialists who guide real estate investors and business owners through the world of alternative lending. Our primary focus is on securing the right capital for your specific goals, whether that's a cash-flow-based DSCR loan for your rental portfolio, an SBA loan to grow your company, or a bridge loan to close a deal quickly and efficiently.

See Full Bio

DSCR LOAN SBA LOAN BRIDGE LOAN