Newb - How do Banks treat HML when doing a Re-Fi?

[James Byrd]

Thanks in advance. I have zero financial background, and I’m trying to wrap my cranium around the finance part of BRRRR. Bottom Line Up Front (BLUF): if I use a personal friend to loan me money to buy my first property, can I still use the “cash out” REFI technique with a bank in my BRRRR strategy? If a family friend lends me $30,000, for example, to buy a foreclosure, where does the lien/title reside? Does my friend get the paperwork in his name or is all of that “in the background”? Would the seller (bank) even care where the money comes from? Reason I’m asking is because I’m now confused on the REFI portion to follow. I get my house, fix her up, get a tenant, and then go to REFI...how would the “cash out” portion actually work in his case? Let’s say my rehabbed rental is now appraised at $80,000...and I get a mortgage now for $80,000, what does the bank look at? Do they get info on my personal debt with a friend? Is that legal? Can I expect to get some cash after the LTV - 30k owed to some other entity? I’m sure this was very confusing...thanks, guys. Bryson