Can you refinance with a cash out on buildable land?

[Christina Kokologiannakis]

We are closing on buildable land in a few days.  We will eventually build an Airbnb on the property but can't do anything till the plans and budget are ready.  Until we can convert the loan in to a construction loan, I want to refinance out of the high interest rate we have on it.  We needed to us a hard money loan due to banks not counting our Airbnb income and my business income.  We are putting 50% down on the property, paying 2 pts and at 10% interest rate.  

I would like to refinance pretty quickly and get back out as much of the 50% cash we had to put down. 

Can some one explain how that will work?  Is it possible? How long do I have to wait to refinance? What do I need to be able to refinance land? 

I really appreciate the help and guidance. 

 

[Mike Smith]

Your best option is to use the first draw on your construction loan to payoff the hard money bare land loan.  Like @Kevin Sobilo said, all loans have quite a bit of closing costs, so you might be better off paying interest at 10% instead of refi-ing into a lower rate. If you can start construction pretty soon, the bare land payoff lowers the rate and also gets your cash back. However, you may run into the same problem on a construction loan of the bank not counting your STR income and business income. They normally want to see tax returns to back up the income claims and everyone wants to lower their tax burden, so most people aren't declaring taxes on all the income they want the bank to use for underwriting. Most construction loans are 75% LTV.