Cash Refi Strategy Questions

[Eric P.]

Hey guys, I plan on doing the BRRRR method, and trying to figure out a cash refi strategy that will work for my situation. First a rundown on some of the numbers I'm working with and my financial situation:

$150k cash available for real estate purchases and rehab

$30k cash reserves

$15k in non retirement investments that I can access for additional cash

Homes will be in my name, not an LLC. I will be getting an umbrella policy for liability coverage.

Homes will be purchased 100% cash, no mortgage.

My credit score is 760+

I do NOT currently work. Between youtube/adsense and interest on cash savings I make about $300/mo. While I plan to go back to work in the future, I have no interest in doing so now as I will be too busy rehabing my purchases (I'm very handy, will do the work myself mostly) this summer and establishing a team to assist in managing these properties when I eventually move out of state. 

I have ZERO debt, and zero living expenses (living free with a relative right now).

I have been reading up on the cash refi qualifications here:

https://www.fanniemae.com/content/guide/selling/b3...

I filled out this worksheet (Fannie Mae form 1038) to see what I can qualify for, using the 2 properties I currently have under contract:

These properties should be in service in June and I would like to try and refi in Nov/Dec this year (after 6 months). This way I can go off of the lease agreement or form 1007 (market rent, SFH) instead of schedule E since I won't have filed taxes on these properties yet. But the monthly qualifying rent I get from form 1007 is lower than it would be if I do everything based on schedule E, according to the worksheet.

The combined monthly qualifying income for both properties I have under contract is $717, according to form 1038 step 2B.

The two homes I have under contract:

Purchase price $20,600. Needs $4k repairs. Should rent for $550+. $35k ARV x .7 = $24.5k for cash refi. At 4.75% over 30 years, that's a $128/mo payment

Purchase price $25,600. Needs $5k repairs. Should rent for $650+. $55k ARV x .7 = $38.5k for cash refi. At 4.75% over 30 years, that's a $201/mo payment

If my ARV is right and I am able to pull out 70% of both properties, that's a $329 payment for both cash refis. $329/$717(qualifying income) = .458 DTI. So I am really close to the .43 mark.

I didn't bother including my measly monthly income from adsense and interest on cash savings since the lender will probably just pick that apart anyways... too sporadic, etc. If they can use it then it could help me get under the 43% mark for DTI.

Questions:

• Based on the above numbers and my financial situation, do you think I am in position to make the cash refi work on these properties?
• I assume I could just pull out a little less to bring my DTI under 43% if needed?
• Should I wait until 2020 to do the cash refi, so I am working off of my schedule E which showed more qualifying income than the form 1007? I'll be doing repairs to both homes (paint, flooring, some kitchen/bath work), so the write offs/depreciation from those might offset any "gains" in qualifying income realized by using schedule E... am I right there?
• Anything else I should consider?
• Recommendations for cash refi lenders in Michigan/Northern MI?