Too good of a deal to pass up!

[Zack Broaddus]

Hi, I am a wholesaler, so I usually pass my deals off to other investors, but I have come across one that is just too good to pass up.  Not only am I getting the house at 57% of its appraised value, but the owner is also doing all of the repairs and applying fresh paint before we close.  That said, my plan is to take out a hard money loan for the purchase, and then immediately refinance it, which would allow me to pull out around $10,000 (based on 75% of the appraised value) as well $200 cashflow each month if the tenant pays the average rent for the area.  The only problem is that I am not sure if the bank will allow me to do a cash out refi because technically I don't have a steady income, since my wholesaling paychecks come in chunks and are not guaranteed.  Is there any way that a bank will overlook my situation and allow me to do a cash out refi since the numbers work so well, and if not is there any other way to do a cash out refi without using a bank?  Any feedback would be greatly appreciated.

[Christopher Brainard]

@Zachary Gwin

It is doubtful - none of the national banks would allow this activity, but you may be able to sell this to a local bank, if you have an established relationship. Generally speaking, they will need you to show two years of tax returns to verify your income, which shouldn't be an issue of how many chunks it came in. Additionally, they will not allow you to refinance based on the appraisal without the appropriate seasoning. 

So, I think your options are to (1) buy the place and wait six months or whatever the seasoning period is (with hard money, probably not a good option) or (2) look for private capital, which is probably the best idea. If the deal is as good as you stated, I'm sure you can find an investor to front the money for a 8% to 10% return for as long as you need. That's the going rate of what we're paying here in Las Vegas, but may be different for private capital in your area.

-Christopher