Qualifying for a Cash Out Refi ?

[Joshua Carter]

Hey folks! Big time fan of the community, first time posting here.

I'm hoping to purchase my first investment property by the end of the year and hope to implement the BRRRR strategy. I am looking for insight/advice about qualifying for a cash out refinance loan. I have a pretty nice nest egg of cash available that I plan to buy and rehab a property with (approx. $100k), however I'm curious/concerned I won't qualify for the refi loan. As it stands, I only make $50k/yr. but am also considering leaving my current w-2 job and going back to being self employed in the trades as I've done in the past.

Does anyone have insight around what I'll need to qualify for the refi loan in general, and if a recent career change will be hurt my approval odds? Or any general tips given the situation Ive laid out in? I just purchased my first home 2 years ago, so I'm pretty novice to the whole loan process in general. I'm doing my best to do my due diligence before I start making big moves.

Thanks in advance!

[Stephanie P.]

Quote from @Joshua Carter:

Quote from @Stephanie P.:

Quote from @Joshua Carter:

Hey folks! Big time fan of the community, first time posting here.

I'm hoping to purchase my first investment property by the end of the year and hope to implement the BRRRR strategy. I am looking for insight/advice about qualifying for a cash out refinance loan. I have a pretty nice nest egg of cash available that I plan to buy and rehab a property with (approx. $100k), however I'm curious/concerned I won't qualify for the refi loan. As it stands, I only make $50k/yr. but am also considering leaving my current w-2 job and going back to being self employed in the trades as I've done in the past.

Does anyone have insight around what I'll need to qualify for the refi loan in general, and if a recent career change will be hurt my approval odds? Or any general tips given the situation Ive laid out in? I just purchased my first home 2 years ago, so I'm pretty novice to the whole loan process in general. I'm doing my best to do my due diligence before I start making big moves.

Thanks in advance!

Use your nest egg to buy a smallish property for cash. Then move in. Then do a DSCR loan to refinance the current property (up to 75% loan to value). Your personal income or employment doesn't come into play and the market rents set by the appraisal's comparable rent schedule will be the income for the property. Even if it's vacant, you'll be able to get 70% loan to value. The key is that you don't live there anymore because they are for non-owner occupied only. You won't qualify for owner occupied if you leave your W2 job unless you get a bank statement loan and most of those are for self-employed borrowers.

Thanks for your reply Stephanie,

I'm unclear as to why I would need to move into the newly purchased property from my current home? I've been looking towards a DSCR loan as a potential answer to my dilemma, why could't I do a DSCR to refinance the new property? It would be a non-owner occupied investment property. What am I missing?

Thanks again!

You're on it. I was thinking you were going for an owner occupied property. Yes, just do a DSCR loan for the new property and you're good to go. Let us know if you need a broker.