Hard Money then Refinance

[Adrian Salazar]

Good afternoon BP community! 

I have a question for you experience investors who are familiar with hard money loans. 

I have a house in San Antonio that I plan on buying November 12. Here are the numbers

Purchase Price = $155,000

Repairs = $5,000 (might need a new roof)

ARV = $205,000

I plan on buying with hard money only because of the time frame needed to close. I want to refinance immediately into an FHA or Conventional loan and then put a tenant in there for 6 months. I plan on using it as a homestead in the future after the tenants 6 months are up. I am currently still stuck in a lease and wont end till June 2019.

I want to purchase this home for a homestead but not until my lease ends. Its a great property in a great location and I don't want to pass on this. I plan on also putting a couple roommates in the house with me in the future so they can help pay down my mortgage. 

Any suggestions on how to structure this? Im trying to avoid paying a HUGE amount as a down payment. 

Thanks to anyone who gives their input. 

[Ryan Blake]

@Adrian Salazar The problem with what you are looking to do is that FHA loans are almost always for owner occupied houses within 6 months. If you will be in the house by then, awesome, go for FHA. If not, then that option is out unless you are willing to lie on the paperwork, which I would not suggest doing after posting in a public forum.

@Michele B. is right that many conventional lenders require a seasoning period before a cash out refinance. However, in Texas I know of two local banks and one state-wide mortgage company that doesn't require seasoning as long as it hits the appraisal number. So you are fine on that part. But I would not suggest what she is about using an FHA loan from the beginning. True it may only require 3.5% but if you do not intend to live in it, its really not a true viable or legal option. I think its best to avoid federal fraud. Just not worth the risk on a sworn affidavit.

Search your local banks and see if you can qualify for a rehab and purchase loan. You may be able to find some that will only require 10% down but you will have to pay a mortgage insurance until you get to 20% equity in the home.

After you do that, then you can look into hard money. Getting it is easy, the payment terms are hard. I represent a Texas hard money lender that lends in SA but like I said above, I would first look to local banks. If you are interested, let me know. I work for one of the lenders that offers 100% financing for the purchase and rehab. We do about 100 loans in SA alone every year. 

Good luck on your financing search. If you have any questions, even if you have no intention of using Longhorn Investments, feel free to ask me. I am a pretty honest person and will shoot you straight.