Colorado Investor Cash-Out: Cheap to Transact, Simple to Refinance
Program and regulatory figures verified July 24, 2026. Details change; confirm your scenario with us.
Colorado makes cash-out refinancing easy: no constitutional home-equity maze, near-zero transfer cost, and a straightforward business-purpose loan. The one place cost hides is the resort-town transfer tax, and that's on the purchase, not the refinance.
Can I cash-out refinance a rental in Colorado?
Yes, under ordinary lender rules. Colorado has no equivalent of the Texas constitutional home-equity restrictions, so a cash-out on your rental is a plain business-purpose refinance. What governs it is program policy: DSCR cash-out commonly runs to 70–75% LTV, qualified by the property's rent-to-payment ratio, with credit and reserves rounding out the file. No constitutionally-mandated waiting period, no statewide fee cap. The mechanics of the ratio are in the DSCR guide; the cash-out just adds a loan-to-value ceiling and, usually, a seasoning requirement.
Colorado is cheap to transact
This is a genuine Colorado advantage. There is no general real-estate transfer tax, because TABOR, the 1992 constitutional amendment, froze the transfer taxes that existed then and prohibits any new ones. The only state-level charge on a sale is a documentary fee of $0.01 per $100 of price, which is $0.10 per $1,000, one of the lowest transfer charges in the country. On a refinance there's no transfer at all, so this line barely registers. Compare that to the four-figure transfer bills common on the coasts and the transactional side of Colorado investing is genuinely light.
The resort-town exception, on the buy side
There's one place transfer tax does bite, and it matters when you're buying a resort property, not when you refinance one. Twelve Colorado towns kept a pre-TABOR local transfer tax, all resort communities, and their rates are not trivial:
| Town | Local transfer tax |
|---|---|
| Crested Butte | 3% |
| Telluride | 3% |
| Aspen | 1.5% (0.5% Wheeler Opera House + 1% affordable housing) |
| Breckenridge, Vail, Frisco, Minturn, Snowmass Village, Winter Park, Gypsum | 1% each |
| Avon, Ophir | Local transfer tax applies (rate not confirmed here) |
Rates verified July 2026; Avon and Ophir confirmed as members of the pre-TABOR list, exact rates not independently confirmed. Confirm the current rate with the town before closing.
On a Crested Butte purchase, a 3% town transfer tax is real money against your entry basis, and it belongs in the deal math from the first offer. It does not touch a cash-out refinance of a property you already own, though, so the refinance side stays clean.
How soon can I refinance? (The BRRRR question)
Buy, rehab, rent, refinance, repeat: the strategy lives or dies on the refinance timeline. The standard answer is that after about six months of ownership, programs will lend against the property's full appraised value, which is what lets you harvest the rehab equity. Some programs shorten that to three months; a few structures work sooner using purchase price plus documented improvements. Which one applies depends on the program and the file, and that's a conversation with no obligation attached: talk to Mike first.
Prepayment penalties: understand the note
DSCR loans commonly carry prepayment penalties, usually multi-year stepdown structures you can buy down or remove for a price. Colorado has no blanket state-law prohibition on prepayment penalties for business-purpose, non-owner-occupied loans comparable to the homestead carve-outs some states have, so treat any specific penalty as a question of the note's own terms, not a state rule. We walk the stepdown schedule against your exit timeline before you lock anything, and your attorney reviews the note. That's the right order of operations, especially on a quick BRRRR recycle.
No pressure, no obligation, and no salesy follow-up: a 20-minute call with our team, real numbers, and a straight answer on whether the deal pencils.
Frequently asked questions
Can I cash-out refinance a rental property in Colorado?
Yes, under ordinary lender rules. Colorado has no Texas-style constitutional cash-out restriction, so it's a plain business-purpose refinance. Expect program-driven limits: DSCR cash-out commonly to 70–75% LTV, qualified by the property's rent-to-payment ratio, with no statewide waiting period or fee cap.
Does Colorado have a real estate transfer tax?
Mostly no. TABOR (1992) froze existing local transfer taxes and bars new ones, so the only state charge is a documentary fee of $0.01 per $100 of price ($0.10 per $1,000), among the lowest anywhere. Twelve grandfathered resort towns are the exception, charging their own 1–3% transfer tax on purchases.
How much is the transfer tax in Aspen, Vail, or Crested Butte?
It varies by town: Crested Butte and Telluride charge 3%, Aspen 1.5% (a Wheeler Opera House levy plus an affordable-housing levy), and Breckenridge, Vail, Frisco, Winter Park, Snowmass Village, and others 1%. These apply on the purchase, not on a cash-out refinance. Confirm the current rate with the town before closing.
How soon can I refinance after buying a Colorado rental (BRRRR)?
About six months of ownership is the standard seasoning to use full appraised value on DSCR cash-out programs. Some allow three months, and a few structures work sooner using purchase price plus documented improvements. Which timeline applies is program-specific; bring us the deal and we'll tell you which lane it fits.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. City and county STR rules, tax figures, and filing fees change; verify current requirements with the city or county, the HOA or metro district, your CPA, or a Colorado real estate attorney before you buy. Loans are subject to buyer and property qualification.