- The refinance is sized on the new appraisal times the lender's leverage cap, then tested on the rent. Both must clear the rehab loan's payoff and your closing costs.
- In the worked example, an $85,000 Kansas City house with a $40,000 rehab appraises at $170,000. A 75% cash-out refinance of $127,500 pays off $116,500 of rehab debt, returns about $6,500 and leaves about $14,300 of your cash in the deal, at a DSCR of 1.16.
- If that appraisal came in at $150,000, a 75% cash-out would fall $4,000 short of the payoff before costs. A rate-and-term refinance at 80%, where offered, cuts the shortfall to about $1,000 after costs.
- Low prices create a floor problem: to reach a $100,000 minimum loan at 75% you need a $133,333 appraisal. In 12 of Jackson County's 51 ZIP codes and 9 of St. Louis city's 16, the cheapest third of homes was typically worth under $115,000 in September 2026.
- Seasoning rules vary by lender, from none on some in-house refinances to 90 days of ownership at others. Ask for the clock in writing before you buy.
Two loans and one handoff
A BRRRR refinance in Kansas City or St. Louis is a brand-new loan on a house you already own. The short-term lender who funded the purchase and rehab gets paid off, and a DSCR lender takes its place. DSCR (debt service coverage ratio) is the rent the house earns each month divided by its full monthly payment: principal, interest, taxes, insurance and any HOA dues. The new lender sizes the loan in two steps.
- Value times the cap. The appraisal sets the value, and the lender's leverage cap sets the most it will lend against it: commonly 75% of value on a cash-out refinance and 80% when you buy or do a rate-and-term refinance, per RCN Capital's and Easy Street Capital's published terms on November 4, 2026.
- The rent test. The rent has to carry the payment on that loan at the lender's minimum ratio. If it doesn't, the loan gets smaller.
If that number is negative, you bring cash to the refinance. The rest of this guide is about keeping it positive.
Why the small houses make it harder here
Both metros have neighborhoods where entry prices are low enough for the rent to carry a loan easily. In Zillow's September 2026 bottom-tier index, which tracks the cheapest third of homes, 12 of Jackson County's 51 ZIP codes and 9 of St. Louis city's 16 had a typical value under $115,000. Cheap houses make the rent ratio easy and the loan size hard, because some DSCR lenders won't write a small loan.
| Lender | Minimum DSCR loan | Appraisal needed at 75% | Appraisal needed at 80% |
|---|---|---|---|
| RCN Capital | $70,000 | $93,333 (but $115,000 value floor) | $87,500 (but $115,000 value floor) |
| Kiavi | $75,000 | $100,000 | $93,750 |
| Crossroads Investment Lending | $100,000 | $133,333 | $125,000 |
Swipe the table sideways to see every column.
Run this check before you buy, not after the rehab. A house that will appraise at $110,000 after the work can be a fine rental, but at some lenders it can't be refinanced at all, and your exit plan has to account for that.
Worked example: an $85,000 house in south Kansas City
Say you buy a dated three-bed in ZIP 64134 for $85,000 and put $40,000 into it. Zillow's typical value for the ZIP was $172,141 in September 2026 and its typical rent $1,467. The numbers below are an illustration, not a live deal.
Buy and rehab
The rehab loan here follows terms Ridge Street Capital published for Kansas City on November 4, 2026: up to 90% of purchase and 100% of rehab, and a sample deal at 10.75% interest-only with 2.0 points. To keep the arithmetic conservative, interest is charged on the full balance for all five months, although many lenders charge only on rehab money already drawn.
| Item | Amount |
|---|---|
| Rehab loan: 90% of $85,000 + 100% of $40,000 | $116,500 |
| Your down payment (10% of purchase) | $8,500 |
| Purchase closing costs (assumption) | $3,000 |
| Points: 2.0% of $116,500 | $2,330 |
| Interest: $116,500 at 10.75% for 5 months | $5,218 |
| Taxes, insurance and utilities during the hold (assumption) | $1,800 |
| Your cash in before the refinance | $20,848 |
Swipe the table sideways to see every column.
Rent and refinance
The house leases for $1,450 and appraises at $170,000, just under the ZIP's typical value. Because cash comes back to you, expect the lender to treat it as a cash-out refinance and cap it at 75%.
| Line | Amount |
|---|---|
| New loan: 75% of $170,000 | $127,500 |
| Less rehab loan payoff | −$116,500 |
| Less refinance closing costs (assumption) | −$4,500 |
| Cash back to you | $6,500 |
| Your cash left in the deal ($20,848 − $6,500) | $14,348 |
| Monthly principal and interest | $891.50 |
| Monthly taxes and insurance | $158.26 + $195.93 |
| Total payment (PITIA) | $1,245.69 |
| DSCR on $1,450 rent | 1.16 |
Swipe the table sideways to see every column.
This deal doesn't return every dollar, and few do at 75%. You own a rented house worth $170,000 with $14,348 of your cash in it, and the rent covers the payment 1.16 times. Whether that's a good BRRRR depends on what else that $14,348 could do.
When the appraisal comes in short
Now say the same house appraises at $150,000. At 75%, the new loan is $112,500, which is $4,000 less than the payoff before you count costs. You'd bring about $8,500 to the closing, and your cash in the deal would rise to about $29,300.
There's sometimes a better option. If the new loan only pays off the old one and doesn't hand you cash, some lenders treat it as a rate-and-term refinance with a higher cap. RCN Capital, for example, publishes up to 80% of as-is value on a refinance and 75% on a cash-out for scores of 700 and up. At 80% of $150,000 the loan is $120,000: enough to clear the payoff, leaving about $1,000 to bring after $4,500 of costs. The rent still clears, at a DSCR of about 1.23.
Seasoning: when the lender will use the new value
Seasoning is how long you must own the house before a lender will lend on the appraised value rather than what you paid. Published rules on November 4, 2026 included:
- Kiavi: cash-out available after 90 days of ownership, and no seasoning when refinancing a Kiavi bridge loan or a free-and-clear property.
- KC Investor Funding: seasoning "typically 90 days of ownership" to base a refinance on the property's value.
Five months from purchase to refinance, as in the example, clears a 90-day clock. A fast rehab may not. Ask the DSCR lender how it counts the days (from your purchase closing or from the deed recording) and whether refinancing its own rehab loan changes the rule.
Rent: the permit comes before the lease
The rent step has a local checklist on both sides of the state line, and it's best started before the rehab ends:
- Kansas City, Mo. The Health Department's Healthy Homes Rental Inspection Program (Ordinance 180248) requires every rental property owner to register, and its landlord page says an application must be filed before opening a new rental property or after a change of ownership or management. The page lists a 2026 permit fee of $25 per unit plus a one-time $25 application fee, and the program's rules say permits don't transfer to a new owner.
- Kansas City, Kan. The Unified Government requires a rental license for residential rental property. New applications are due on a change of ownership or before occupancy, and licenses expire April 30 each year.
- Overland Park. The city requires a rental license for all rental homes: $120 per building, valid for two years, with an exterior inspection.
- St. Louis city. A rental unit needs a Certificate of Inspection from the Building Division before anyone moves in. The application is $120, or $200 if a tenant is found living in a unit without one.
- St. Louis County municipalities. Many run their own occupancy inspections at a change of tenant, including University City, Ferguson and Kirkwood.
Get the permit, license or certificate in hand before the tenant moves in. Then the lease you give the appraiser and the underwriter describes a unit that can legally be occupied.
Taxes after the rehab
A rehab shows up on the tax bill at different speeds on each side of the state line. Kansas appraises property at market value as of January 1 every year (K.S.A. 79-1455), so a house renovated this year is likely to carry its new value on next year's bill. Missouri reassesses real estate every odd-numbered year, per Jackson County's assessment office, so the bill can lag the work. Ask the assessor how and when your improvements will be picked up.
Underwrite the refinance on the bill at the after-repair value, not today's bill. In the example, the Census-based 1.12% gives $158 a month. A full assessment in the Kansas City Public Schools district, at 19% of value times the 2025 levy of 8.3882 per $100 of assessed value, puts $170,000 of value at about $226 a month, and the ratio falls from 1.16 to 1.10. Jackson County's recent history is a reason for caution: KCUR reported a 30% average assessment jump in 2023, followed by a State Tax Commission order capping increases at 15% and tax credits on 2026 to 2028 bills.
How United Lending fits both legs
United Lending offers fix-and-flip and bridge loans for the purchase and rehab, and DSCR rental loans for the refinance. On the first leg we lend up to 95% of the cost at the start (initial loan-to-cost) plus 100% of the construction holdback, the rehab budget, on 12- to 18-month terms, interest only, with no prepayment penalty. On the refinance we lend up to 80% LTV on a cash-out, with credit scores from 620, a DSCR from 0.75 and loans from $75,000. Those are separate limits, not one combined offer: the highest leverage goes to stronger credit and rent coverage, and a lower score or ratio means lower leverage. Rates on both legs are quoted per deal.
The appraisal and title work set the refinance date, so order the appraisal as soon as the lease is signed.
Both legs are business-purpose credit for rental investors. A house you or a relative will move into falls outside that, and calls for a residential mortgage lender.
The local BRRRR checklist
- Pull renovated sales in the ZIP to set a conservative after-repair value, and compare it with Zillow's typical value there.
- Compute the break-even appraisal: (rehab loan payoff + refinance costs) ÷ the cash-out cap.
- Check the DSCR lender's floors on loan size, value and ratio, and its seasoning rule, in writing.
- Line up the rental permit or occupancy inspection for your city before the rehab ends.
- Sign a lease at market rent, then order the appraisal with the lease in hand.
- Budget taxes on the after-repair value, not the purchase price.
For the rent side of the ratio, see the Kansas City DSCR guide and the St. Louis DSCR guide.