Finance After Paying Cash

[Kevin Savage]

Hello,

My house is paid off, so my strategy is to place cash bids via a HELOC in order to obtain great deals. I landed my first deal, a duplex, in June of 2018 doing just that. In talking to several lenders, I was informed that most banks have a six month waiting period before they will allow you to place the property that you bought in cash/HELOC, into a standard, 30-year fixed loan. I was fine waiting the six months. Today, I called a popular bank to inquire about rates and terms. I was informed that their starting point for a 30-year fixed was 5.875%, and roughly $4K to close. Then, additional options were available to buy the rate down with additional closing costs. For example, you could get a 30-year fixed rate below 5% for roughly $8K in closing costs. I thought the rates seemed a little high. Therefore, I have several questions. 1) Do you feel that a nearly 6% interest rate is a competitive rate in today's market for a duplex? If not, does anyone have any suggestions on lenders that may provide a better fit? 2) Would you consider buying the rate down; or, conserve cash and pay the higher interest rate? 3) Has anyone faced the six month requirement and do you have a solution around this? For example, have you figured out a way to buy in cash and quickly refinance the property?

Thanks in advance for your help with these questions!

Kevin