How quickly can I do a cash out refi

[Scott Rist]

Hi BP, I have been searching, reading, and talking to various people about doing a cash out refi after a cash purchase and receiving a wide range of answers.

I primarily do flips, as it doesn't make sense to buy and hold in my area of CA. I am moving early next year to another market to continue flipping and buying and holding. My plan is the BRRR strategy.

My question is, if I buy a property with cash and do my standard rehab and rent it how quickly can I do a cash out refi?  I only have so much capital to work with right now and I don't want to tie the money up for very long.  I have been told that I might need to wait as long as a year to refi.  That won't work for me at this stage.

What if I was to get a private note on the house from a family member (using my funds) and just refinance out of that into a conventional loan?  Any seasoning period with that?   Would there be any issues using a family member?  

Thanks a lot for your thoughts.

Scott

[John D.]

You can typically cash-out refi immediately/any time, but the loan amount will be based on the purchase price or purchase price plus documented repair costs (not the appraisal value, unless is appraises low).  Typically in order to have the loan amount based off the appraisal value, you need to hold the property for 6 months.  With some lenders, this is 12 months.