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Started By
Message
Anyone familiar with cash out refi on investment properties?
Posted on 10/11/18 at 8:35 am
Posted on 10/11/18 at 8:35 am
Looking for some advice on a deal I have under contract and new to the brrrr/cash out refi idea.
Looking for someone familiar with them that I can bounce some ideas off of.
Thanks
Looking for someone familiar with them that I can bounce some ideas off of.
Thanks
3
Posted on 10/11/18 at 3:26 pm to mandevilletiger34
you can email me at edhawk76@gmail.com i am a lender here in baton rouge and can answer your questions for you.
Posted on 10/12/18 at 11:28 am to mandevilletiger34
Smaller, regional banks are likely your best option. Typically, cash out LTV's are lower than a purchase LTV. Not too many banks will go 80% with a cash out component. It can be done, but you may have to shop around. Make sure your Debt Service ratios are in line with the amount and amortization schedule you are asking for. Typically you need 1.25x, but some banks will push higher with the cash out component, to say 1.35x, so ask ahead of time.
I am a little confused though. How are you going to cash out on a deal you have under contract? Are you buying for that much less than appraisal? If it is a refi, never mind that question.
Most banks are going to want to know specifically what you want to do with the money, so be prepared with a good answer. If you are a seasoned RE investor, they may be good with you just wanting the money to look for your next deal, but if you are new to RE investing and/or new to their particular bank, you will probably need a better reason than you just want to hold the money.
That is just my experience fwiw, and that is not in the BR/NOLA market. Good luck.
I am a little confused though. How are you going to cash out on a deal you have under contract? Are you buying for that much less than appraisal? If it is a refi, never mind that question.
Most banks are going to want to know specifically what you want to do with the money, so be prepared with a good answer. If you are a seasoned RE investor, they may be good with you just wanting the money to look for your next deal, but if you are new to RE investing and/or new to their particular bank, you will probably need a better reason than you just want to hold the money.
That is just my experience fwiw, and that is not in the BR/NOLA market. Good luck.
Posted on 10/12/18 at 3:43 pm to mandevilletiger34
I'm guessing OP is buying it with cash and then would like to refinance the property?
I'd be interested in hearing some more info also. Its not easy to do this on 2nd properties. As said call around. I may be looking to do this myself soon.
I'd be interested in hearing some more info also. Its not easy to do this on 2nd properties. As said call around. I may be looking to do this myself soon.
Posted on 10/13/18 at 7:22 pm to baldona
I initially put under contract to do my 2nd flip, but after researching the cash out a little bit more...I now like the idea.
The house is in a great area for a rental...less than a mile to the causeway in Mandeville.
I have the cash for the 20% down and the rehab, but like the idea of being able to pull some of the cash out in 6 months to put towards another property.
The house is in a great area for a rental...less than a mile to the causeway in Mandeville.
I have the cash for the 20% down and the rehab, but like the idea of being able to pull some of the cash out in 6 months to put towards another property.
Posted on 10/13/18 at 7:39 pm to mandevilletiger34
Bookmarked. Keep us updated you are able to do this.
Posted on 10/17/18 at 12:42 am to mandevilletiger34
It works best when moving from cash or a high interest hard-money or private loan. It’s a little more difficult making the numbers work from conventional to conventional.
Just make sure you're stretching your reno dollars to get the most equity possible, and hope you get a liberal home appraisal.
I do love the BRRRR method, and hope to do one soon. It’s definitely the quickest way to wealth in REI.
Just make sure you're stretching your reno dollars to get the most equity possible, and hope you get a liberal home appraisal.
I do love the BRRRR method, and hope to do one soon. It’s definitely the quickest way to wealth in REI.
Posted on 10/17/18 at 11:21 am to mandevilletiger34
I'm sorry Mandeville. My post is from my experience with commercial properties. I have no idea how they would translate to residential, if at all.
Posted on 10/18/18 at 12:24 pm to Sev09
quote:
hope you get a liberal home appraisal.
This is really your only hope, imo. Not familiar with that market but I do know it is hot.
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