DSCR Cash Out Refi Questions

[Tyler Rabanus]

Hi everyone,

This is my first time posting and I had a question regarding DSCR cash out refinancing:

Are the DSCR loan amounts calculated strictly on the debt service ratio or does an appraisal come in to play?

Reason for question: If i were to purchase a SFH for $75k and spend roughly $175k renovating the 3 bedroom home and converting a massive garage into two 1 bedroom apartments, I believe the property would be still appraise for about $220k. The combined revenue as LTRs, however, would be about $3000/month. If I assume a 1.25 ratio, this scenario would allow me recover more capital than a conventional mortgage.

Please let me know your thoughts. Thanks!