Cash out Refi

[Raj Patel]

Hi everyone. 

So still planning my next move with the expectation that I start this process around May 2nd week. Currently tied up with other things. 

I currently own a retail building I purchased years ago. 3 years left on the loan with a sub 4% interest rate. God's grace have had no problems paying PITI so far. Cash flowing positive. I was hoping to cash out refinance and come out with around $800k cash on hand post principal repayment. I feel this target can be achieved given recent cap rates sold in the area, and hundreds of thousands of dollars worth of renovations combined done by me the landlord (1 unit+exterior), and my amazing tenants who did gut renovations of their units.

The general rule of thumb is to use 3 lenders for cash out refinance right? My current bank, and possibly 2 others.

The current bank I’m wary of because they used a 10% cap rate at time of purchase for the appraisal which is Trenton/Newark/Mott Haven level bad. They claimed the appraisal was independent but I have my doubts. I had to put 35% down, and make up the gap which still leaves a sour taste in my mouth. Their 10% cap rate valuation was even less than the town’s market appraisal to determine property taxes. That’s virtually impossible given that the town goes as low as possible. They also did not allow me to dispute, and the seller on the other side did not want to compromise so I was left stuck in the middle. I will look for 2 other lenders who are also going to be comparable national banks. But the hope is the $800k will happen. 

I have a few questions about the cash out refinance side of the transaction. Besides LTV what other factors are considered? My credit score is 800+. Will they look at DTI? I have a huge personal mortgage (P,I,T,I) that currently takes up around anywhere from 25%-38% DTI depending on how you calculate gross income. Just w2 would be around 38%. Would a cash out refinance to a LLC factor into my personal DTI? When I purchased the building I had no personal mortgage so my DTI from the personal side was non existent. Submitting bank statements/liquid assets won't be a problem.

Thanks