Need some financing suggestions/help

[Alan Salgado]

I'm waiting to close on a rental property I won at auction. I'm not interested in financing the initial purchase for several reasons: Cost of financing - appraisal, closing costs, etc. and the ability to 'cash out' at market value vs purchase price.

If I close with cash, I'm told I can't refinance or cash out at FMV for the first 12 months as during that period, financing still refers to the purchase price.

Apparently another option to get around the 12 month constraint is to show improvements made that increase the value. It's a very clean and well kept property and the only improvements I would make for a rental are maybe heat pump replacement & bathroom remodels.

I'm not sure if that would be enough. Any alternatives?

[Nicholas Covington]

@Alan Salgado There are plenty of programs out there that do not require you to have held that specific property to cash out. Most will allow you to go up to 70-80% LTV. However, they want to you normally to hold some experience with either owning your own property for at least 12 months or have some experience holding another rental. There are exceptions but their LTV will be capped probably around 65%

You are going to work to look for lenders that are offering "non-qm" products normally that revolved around the DSR (debt servicing ratio) those are geared towards rental homes.

You were told that you needed to wait 12 months because that was the overlay of the company you were working with. Different places have different rules.