Investor · Austin, TX · Member since 2014 · 144 posts · 86 votes
Hey BP,
I recently made some major upgrades to a property of mine and wanted to do a cash out refinance on the property. It's in a conventional 30 year at 5.5% with about 53k on the clock. I figured I could cash out about 15k on this property and move it into a new deal, as well as lowering that 5.5% rate. Now, after some research I learn that after 4 mortgages you cannot do a cash out refi with a 30 year am, and I would need to come up with a different plan. Are ARMs my only option here? I suppose I could get a portfolio or commercial loan on it but this might kill my cash flow with a shorter term and higher rate.
Has anyone been in this position before? What did you do?
if you have a decent portfolio and good credit I would go into local banks who will not sell the notes. They have more flexibility and able to work with you w little more.
We get 4.25-4.50%, 25 year amort and must be at 80% LTV of appraisal. We typically by cash (under market), do work then get financing. Last 2 buys.
Duplex bought for 318k. Light rehab of 20-23k. Appraised 420k. We do not get much cashflow ($400/mo before repairs, $200 after repairs in our model) but we do not have much money on and we have a beautiful asset.
Duplex bought at 195k. Did 30k in repairs and appraised at 320k. We also converted upper unit into 2 seperate units so we now have a triplex that cashflows over 1k/ mo amd we got paid 20k to but this place. We call this a solid triple, maybe home run.
I just did a cash out refinance in South Carolina. Closed Dec. 29th and I have 6 properties. The rules literally changed right before we started, from 4 to 6. For once in my FAVOR! lol. I got a 4.85% interest rate. The only catch was I had to leave 25% in the houses. It was a 30 year loan through a traditional mortgage broker. She was so amazing that if we head to Maryland, I plan on using her there too, since shes licensed in MD too . Let me know if I can help.
That's pretty fantastic, can you FWD me some info in a PM? I'd certainly be interested in speaking to her. Everyone I talked to said 4 is the limit, and it sounds like they may just be a few weeks behind the times! Thanks!
That's pretty fantastic, can you FWD me some info in a PM? I'd certainly be interested in speaking to her. Everyone I talked to said 4 is the limit, and it sounds like they may just be a few weeks behind the times! Thanks!
She was absolutely amazing and I highly recommend her. She did two cash out refinances, and I have 6 houses on my name. So I know it is possible. Sending a pm.
if you have a decent portfolio and good credit I would go into local banks who will not sell the notes. They have more flexibility and able to work with you w little more.
We get 4.25-4.50%, 25 year amort and must be at 80% LTV of appraisal. We typically by cash (under market), do work then get financing. Last 2 buys.
Duplex bought for 318k. Light rehab of 20-23k. Appraised 420k. We do not get much cashflow ($400/mo before repairs, $200 after repairs in our model) but we do not have much money on and we have a beautiful asset.
Duplex bought at 195k. Did 30k in repairs and appraised at 320k. We also converted upper unit into 2 seperate units so we now have a triplex that cashflows over 1k/ mo amd we got paid 20k to but this place. We call this a solid triple, maybe home run.
@Elizabeth Colegrove I'd love to speak with her as well. Question, did you do a cash out immediately after purchase (delay finance) or were the properties seasoned for 6-12 months?
Are you holding these in an entity? I have been working with a lender to refinance our current deals after rehabbing (typical BRRR strategy) but I have been seeing much higher rates which I expected was due to the commercial aspect of the loan products. Those rates are really solid for non-conventional if that's the case. Can you go into any more detail?
We hold every property in an entity. The banks like when we store some money in a savings account but to us that is the cost of doing business, like closing costs.
We have done quite a bit with our 2-3 banks so they are good to us. When we started we were on 5%, 10 yr. Amort with 3 year balloon. But that was all we could get starting out.
Thanks for the info. I am able to find 30ams but just looking at rates in the 7s. I would probably rather have that then a balloon, but I may be shopping for a local bank to work with in the near future anyway.
@Jerred Sleeth if you have four mortgages the may be willing to roll all into one. Our firat was one mortgage for 3 duplexes. The only thing if we sold a place the payment stayed the same.
The nice thing is refi is usually really easy with staying with local banks.
@Rex King I have considered rolling them all into one, however one of the rates is rock bottom, and due to a higher loan amount, when I ultimately end up with a much higher rate my cash flow will really suffer. I haven't quite figured that one out yet!
@Jarred Sleeth I have a Mortgage broker in the MD area that I'm working with that will get me up to 10. I spoke with him tonight about the strategy for 5-10 and he's assured me I'm good to go (just cashed out #4, will do 5 in about 3 months). I'm only using 30 year fixed, with rates under 5 (for my first 4, haven't seen the rate for #5). Caveat is I'm not using an entity, and I have credit above the 720 mark which puts me in those rates.
PM me if you want his info, happy to give a referal.
@Martin Harris Thanks for the info. My credit is excellent, the issue I am running into is finding the right loan outside of the conventional arena. I'm trying to move forward buying just with the entity. Refinancing the ones I bought in my name is becoming tricky. I have a few leads out right now from this thread already, but you may hear from me. I appreciate the help!