How soon can I refinance? And at what rates/terms?

[Andrew Michaud]

Hello, I am closing on my very first deal two weeks from now. I am already looking ahead into purchasing the next property. I have several questions about refinancing.

I am buying a triplex for 60k. All good tenants, and great cash flow. Assessed value is 73k and market value is 85k. Property needs a new roof and and there are other areas for forced appreciation room. 15 year amortized at 4.5% and 20% down. So 12k skin in before repairs, 48k owed on property.

I am looking into purchasing a second property as soon as I do the updates on this one. Second property is a 6plex. Market value is over 200k and she is asking 150k and I haven't even began to negotiate. Great property, elderly landlord looking to get out of the game. Here are my questions:

How soon can I refinance on this conventional mortgage? 

What are the terms and interest rates on a refinance? Are they around the same as the standard conventional multi family loan? (15-20yr, 4-5%)

Will the bank look at me as having too much debt in a short amount of time if I buy this first property, refinance, then use that as a down payment for the next property that I will also owe money on? I will have two mortgages correct? One for the refinance and one for the second property?

Also, is it possible to owner-occupy on the second property and only put 3.5% down even though its a 5+ unit commercial property?

[Chris Mason]

Cash out refinances come with your choice of a higher rate, higher discount points, or split it 50/50 between the rate and the discount points. 

Prior to the six month mark, the market value of the property will be considered the lower of your purchase price or the current appraised value. 

After six months, purchase price is ignored and only current appraised value is used.

If you plan on refinancing ASAP, don't buy the rate down (discount points). Jack the rate up and ask for a lender credit (negative discount points) to help cover closing costs on the refinance. Eg, take the lender credit from the purchase mortgage & use that money you kept in your pocket to pay for the higher discount points on the cash out refinance so that your "permanent" financing has the lower rate, rather than your "purchase" financing that you're only going to be in for six months or so (according to your plan, anyways). You're lender isn't going to collect more interest in that six months than they gave you in lender credit upfront, so you're basically capitalizing on the fact that prepayment penalties are a thing of the past.