Cash-Out Refi w/o 6-mo Seasoning Period

[Brian Bistolfo]

Hi All,

I'm close to an offer on a BRRRR deal but am hung up on the second-to-last R! I've read up on the Delayed Financing Exception (excellent post on that here ) but unfortunately you can only get your purchase price back out, not the full 75% of appraised value.  So you'd still be paying for the rehab in cash...a no-go if you want to Repeat quickly!

Are there any good strategies for getting a cash-out refi (75% LTV) on the of appraised value immediately after tenant placement? Any new ideas/suggestions would be appreciated. Here are two that could work but I'm not sure about:

I could do a refi for the purchase price immediately, then a full refi 6 months later.  Unfortunately this would incur a lot of extra closing costs...probably $2k-$3k, right?  Say $50k purchase price and $25k rehab.  Would love to do this if y'all think closing costs could be significantly lower.

I've also heard of investors getting a loan from an LLC for the full purchase + rehab price (deed filed at county courthouse), then coming to their lender or bank for a refi once rehab and tenant placement are done...in this scenario there aren't seasoning period restrictions since there's already a loan in place when you run title. Have any of you done this successfully or know someone who has? It seems like this would be SOP for the BRRRR strategy but I haven't seen it discussed much.

Many thanks!

-Brian