Looking for private money lenders/refinance seasoning period

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Looking for private money lenders/refinance seasoning period

Inga Davis
Member since 2023 · 5 posts · 10 votes

Hello,

I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!

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Jay HurstBusiness Member
Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
2y
Quote from @Inga Davis:

Hello,

I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!


 Yes, we have a no seasoning period product. 

Hurst Real Estate, INC4.991 Reviews
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  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!


     Yes, we have a no seasoning period product. 

    Hurst Real Estate, INC4.991 Reviews
    WebsiteView Page
    1Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 656 posts · 318 votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!


     Inga,

    There are certainly lenders with 90 day or less seasoning, but as you’ve found it is about finding those groups. This is a great place for that!

    Just shot you a dm, would love to be able to help if I can. 

    Good luck!

    [email protected]417-427-2612
    1Reply
  • Ko KashiwagiPro Member
    Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
    2y

    Hi Inga,

    As other have mentioned, most lenders require 6 months but there are ones out there that can do 3 months. I don't think you need to necessarily go private money here. If you are looking for a 30 year fixed, it's likely best to go for a DSCR lender that can do 3 months seasoning.

    Happy to help.

    310-848-9776
    1Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 495 posts · 130 votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!

    Congratulations on completing the rehab! Yes, many DSCR options allow shorter seasoning periods. We can even waive the period altogether with documented rehab. Please reach out if you need assistance or if we can help in anyway.

    cheers!
    0Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    2y

    Hey Inga - 

    You shouldn't have to go with private money to make this work, that would be more expensive than necessary. DSCR loans have varying seasoning periods but if you completed rehab that can support the new value, you can bypass that requirement. Happy to chat further if you'd like to reach out!

    [email protected]330-354-6590
    Brittany Minocchi - Barrett Financial Group, LLC522 Reviews
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  • David Pearl
    Lender · Member since 2024 · 121 posts · 14 votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!


    Hi Inga! Like some others have mentioned a cash out refinance using a DSCR loan can be done with some lenders with your seasoning. Happy help!

    0Reply
  • Jason Park
    Lender · 5760 Northampton Blvd Ste 108 Virginia Beach, VA 23455 · Member since 2024 · 37 posts · 17 votes
    2y

    Hey Inga,

    I have seen in the past typical seasoning periods to be 6 months, I have seen it as low as 4. Currently, we have a product that have zero seasoning period! 

    Also, your small local banks may be a good options; however, they usually go into a 5/25 ARM products.

    Happy to help if you need anything else!

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seosoning requirement so that i can buy my next property with my heloc? Thank you!


     Hi Inga, 

    You may refinance based on the ARV with a DSCR loan, with no seasoning period.

    There is a few ways of approaching this. 

    1. If you bought in cash and put rehab, you can refinance 100% of the cost (purchase + rehab) so as long as the loan amount does not exceed 75% of the new appraisal. 

    2. If you bought under market, put at least $10k in rehab work you may refinance 75% of the new appraised value, (can exceed 100% of the cost spent, however there is a rate adjustment) 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 512 votes
    2y

    There are DSCR loans that will use the new appraised value after three months seasoning period. DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    Happy to connect to discuss further.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
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    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Yes definitely . There are also no seasoning options . What is the scenario looking like ? 

    0Reply
  • Colin McMahon
    Lender · Miami · Member since 2022 · 99 posts · 18 votes
    2y

    Hey Inga, 

    As long as the HELOC is not against the subject property (and there are no other liens) you can do what is considered delayed financing.

    If there is a lien against the subject property most companies will have a 6-month cash-out seasoning requirement to complete a cash-out refinance, but to use an increased property value (above what you purchased it for) you will have to wait 12 months. 

    You could do a rate and term refinance to pay the HELOC off rather than take cash out. The other option would be to get a mortgage on the next purchase and leave your HELOC drawn.

    0Reply
  • Eugene Neal
    Lender · Member since 2022 · 138 posts · 20 votes
    2y
    Quote from @Inga Davis:

    Hello,

    I just purchased my first property using my heloc, it's renovated and rented out (BRRRR strategy). I bought it 3 months ago and am running into a problem when it comes to refinancing it due to the seasoning period. Most lenders seem to have a 6 month seasoning period, so I can't do a cash out refinance right now at 3 months after purchase. Are there private money lenders who do cash out refinancing deals as an alternative? Or what is the best way to get around this seasoning requirement so that i can buy my next property with my heloc? Thank you!


     We have a 3 months seasoning requirement so they do exist. We can underwrite the file within 24 hours to give you a better image of some options. Send me a message if you have any questions or want to schedule a discovery call. 

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