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Updated almost 7 years ago on . Most recent reply
New property: Buy cash, rent and refinance in a year or finance
Hey folks,
I'm purchasing 2 brand new duplexes (new construction). Typically I finance the property by putting 25% down however, then my money is tied into the property for a long time or until I refinance. Would it be better to purchase all cash, find the tenant, and then refinance and hope that a higher appraisal will allow me to get all my cash out? I believe I'm receiving the new construction for about 10% below what it will appraise for so I only need it to go up 15% to get all my money back. Will banks do this or should I stick with keeping my 25% in each duplex?
Not sure if you need the numbers but people seem to always ask on this forum so: Purchase Price Per Duplex- $250k, expecting rents to follow 1% rule ($1300 per side). Expected appraisal around $270k. So I'll need to put down $62.5k for each duplex if I finance. Thanks in advance.
Most Popular Reply

Amit,
"Would it be better to purchase all cash, find the tenant, and then refinance and hope that a higher appraisal will allow me to get all my cash out?"
Hope is a poor strategy. Have you spoken to an agent or someone with MLS access that can give you a solid appraisal value?
270k doesn't sound like it's going to allow for a sensible refinance due to closing and transaction costs.
Do you have a bank lined up who will do the refinance? I work with some banks that will refinance right away and others that won't refinance until one year of ownership.
Best of luck!
- Cameron Tope
- [email protected]
- 832-802-0848
