cash out refi VS conventional

[Tony Antonelli]

we've bought and sold several houses with cash and conventional mortgages but we've never done a cash out refi. we really like coming to the table with a cash offer but we're starting to think about expanding our portfolio in a new market and as it turns out, our cash is not endless :(  so right now our thought is to buy 1 or 2 properties with cash just to get the ball rolling and then refi to get some back for down payments on a few more.  

i guess my question is: aside from potentially missing a deal by not offering cash, how much more expensive is it to pay cash up front then do a refi VS just doing all conventional loans from the start?   we're dealing with single family properties in the 100-200k range. 

thanks in advance for any advice. 

[Dan Schwartz]

@Tony Antonelli a conventional cash out refi costs as little as .375 pts more than the purchase money loan.  It depends on the size of the loan, and how your lender handles it.  But that’s $375 per $100K of loan, which is a pretty insignificant cost if you are able to get much better deals by initially paying cash.  

This is based on my experience cashing out an investment property. Mine wasn’t a “delayed financing” loan, which may be what you would be doing. 

Talk to some lenders and get their hard numbers.  Good luck!