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Updated over 6 years ago on . Most recent reply

Account Closed
  • Orlando, FL
10
Votes |
27
Posts

Refinance Options for SFH Buy & Hold

Account Closed
  • Orlando, FL
Posted

I'm beginning research on a particular strategy and need advice. My strategy is very common, but it's to use HML to buy and hold 1-4 unit homes then refinance and use equity to purchase another. While analyzing deals that would work for me, I'm not sure what the best one is in terms of refi options.

Do banks consider ROI or appraised value?
How is the equity most commonly used for another deal? Line of credit, cash out refi?

I realize these answers could easily be found online, but I'd like to hear from you all too as I learn the process. Thanks! 

Most Popular Reply

User Stats

58
Posts
41
Votes
Michael Cross
  • Rental Property Investor
  • Smithsburg, MD
41
Votes |
58
Posts
Michael Cross
  • Rental Property Investor
  • Smithsburg, MD
Replied

Carrie,


Ask around locally too. I expected 70-75% LTV on appraised value as well when refinancing investments i did locally using the brrrr strategy. I was surprised when i found a local credit union with a commercial department offering 80% LTV. In my case, I was walking through a different property with my realtor and discussing refinancing one property before the next deal. He relayed the recommendation he had received from another investor he works with and suggested i talk with that other local investor about his experience.

1-4 unit properties provide many different options for refinancing but be prepared for your appraisal to not always hit exactly what you expect. I would recommend you leave yourself some room in the numbers when you go to refinance out of the HML and have some extra cash on the side just in case.

  • Michael Cross
  • Loading replies...