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Updated about 10 years ago on . Most recent reply
![Lorenzo Jackson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/69620/1670982737-avatar-classicice.jpg?twic=v1/output=image/cover=128x128&v=2)
Process of Cash out Refi
I hope you enjoyed your Holiday season,
I'm working a deal for a triplex, the unit cost 32.5k, needs 45k in repairs. The ARV should be 150k-160k. I should be closing before the end of the year.
I'm using hard money for acquisition and repairs. I'm looking to cash out refinance out of this loan to a standard 30yr fixed rate at least 75%ARV. I can have the entire building renovated in 3 months. How soon can I get out of the loan?
I am getting mixed answers
-Some brokers are telling me I have to wait 6 months,
-Some banks are telling me I have to wait a year.
I am in Philadelphia, PA
Any recommendations, suggestions or lender referrals will be appreciated.
Thank You,
Most Popular Reply
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Hello Lorenzo,
I posted a post similar to this a few weeks ago. I am in the process of trying to acquire a second property to do exactly what you have done. I spoke to one particular bank so far and they told me that I would have to have an existing 12 month mortgage paying history in order for them to refi my hard money loan at their bank. I bought my first home in September so I do not yet have 12mos of mortgage history even though I do have good credit history elsewhere with other and different loans. I was also told by that same bank that you may not get appraised for much if you do an appraisal within six months because an appraisal is typically good for six months and the only way that the home will appraise for more money is if the home gets some sort of serious repair such as adding a bedroom or breaking down walls or adding a new bathroom and that regular cosmetic work (paint, floors) would not count. I believe that this varies among the property in question in respect to the neighborhood. If you did your comps correctly, I believe that you can still profit.
However, some banks will not refi you for the entire cost of the new loan (it is usually only a percentage of the new appraised value) but you can double check that. BTW, do you plan on bringing in tenants or re-selling after the refi?
Please let me know how your deal turns out because I am looking for advice to do the same exact thing. Best of luck to you!