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Updated about 8 years ago on . Most recent reply
BRRR - How to handle cash out refi check? (more inside)
Hi guys, I just performed my first BRRR. The house purchase was around 15k, rehab around 15k, and cash out around 45k after 75% arv @ 4.5% under my own name.
During the mortgage application, the bank was very weary of any debts, and loans used to help fund this venture. More specifically, they didn't want a small 7K cash advance from the bank appearing as if it was used to purchase the home.
So here we are...Long term I want to acquire more properties, more loans, but we may be at a hard stop if the lender thinks that this cash out refi was used as funds to purchase the next home.
I operate as a sole prop, with 2 separate banking institutions: one for business (re) the other for personal. I considered putting the check into my personal account, then "trickling" in 3-4K a month (what I earn normally from the day job) as conributions to the business account. With this method it will confirm that the funds used for the next house were from my day-job paycheck, transferred weekly to the business account until it reached 20k.
Am I way off with this thinking?