Cash-out refi after full-cash purchase

[Nick Janovich]

I'm currently looking at a foreclosed property. Fannie is requiring that investors have a cash offer. The property is $24,000. Needs about $10,000 in repairs. ARV is $50,000. Not quite the numbers that hard-money lenders want to see. And I don't really want to flip. It is a multi-family property that I want to hold.

I have the $34,000 available in the form of a HELOC on my primary residence that I would lend to my LLC. So purchasing the property and renovating is not an issue. However, I don't want to take years to pay back my personal HELOC. I'd rather have a note in the name of the LLC using the RE as collateral and immediately pay back (most) of my personal HELOC.

Has anyone had any recent luck with a cash-out refi if you own the property outright? I searched the forums and saw some older posts but wanted to see if this is still a common practice. Is there another way I should be approaching this?

[Joe Villeneuve]

Yes. Depending on the source of the refi, you can do from 70-80%, cash out, and seasoning anywhere from 2-12 months. We use sources that give us 75% in 2 - 6 months. What you are describing is the normal way we do REI.

Joe Villeneuve
REcapSystem
A2REIC