Question about BRRR & Refinancing

[Seth Lipper]

Hi Everyone,

I have a few simple questions regarding BRRR and subsequently refinancing that property. I am located in the tri-state area and am looking to grow my portfolio. I currently own one buy and hold three family. One strategy that I have been looking at is BRRR. I have most of my money tied up in this first property, but can access the equity via a HELOC.

If I find the right property, I'd like to use a combination of my HELOC and a HML to buy and and rehab the property. In a simple example, is the following possible?

Buy a property for $100k

Rehab said property for $100k

ARV after rehab and appraisal = $350k

Refinance the property at 75% LTV - $350k x 75% = $262,500

$262,500 pays HML, HELOC, and remaining to me

So now I have 25% down on this property, repaid the HELOC and HML and now have approximately $60k?

I know this is SUPER, SUPER, simplistic example not accounting for HML fees and rates, holding costs, contractor fees etc., but am I missing something? Does the property have to go through a phase of seasoning before I can refinance into a 30 year mortgage? Or do I just need to complete the work and have an appraisal? Any advice is appreciated.

Thank you so much,

Seth

[Jerry Padilla]

@Seth Lipper

Is this a SFR or a MFR? Here are the LTV's for a cash out;

On an investment property; A SFR if you have #1-10 mortgaged properties, you can pull out up to 75% of the equity and on 2-4 units is up to 70% equity.

@Jaysen Medhurst

You can do delayed financing prior to 6 months, but you are limited to a max cash out of purchase price plus closing costs. At 6 months you are able to go according to the new appraised value with the LTV's listed above.