Cash out refinancing 1st investment property

Camden, NJ · Member since 2014 · 9 posts · 2 votes

Hi all,

I bought my 1st investment house 6 months ago in New Jersey. My plan for it is BRRR, it is finished and ready to rent now, but i need to cash out refinance it ASAP.

I bought house with cash $45k and use $18k in credit card to fix the house. I dont have to pay interest on it for the next 10 months. The ARV is $100k.

I have talked with a lender that i used before but they could not give me a cash out refinance due to my credit score is too low. It went from 720 to 620 since the balance on my credit card is too high.

What should i do to get my cash out?

Thanks for all tour help !!!!

0 Reply

20 views

Most Popular Reply

Paige Kelsey

Rental Property Investor · Vancouver, WA · Member since 2015 · 112 posts · 142 votes

SELLl! You would have made at least 30k . You can pay off debt and be ready with more cash for the next deal. It is not always possible to Brrrr from the first one. Many people will do a few flips to up their capital to the buy and hold but mostly as they do they are building relationships with local banks, credit scores go up and they get a line of credit fron the bank.

or.......go with a 2nd- home improvement loan and try to get that for the debt that you owe on you cc. It will at least be at a lower rate.

3 Reply

See this reply in the discussion

35 Replies

Jump to latestLatest

Sort by

Harjeet BhattiPro Member
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
8y
@Chanh Tran You still can cash out but interest rate will be higher. Work on your credit first so you will have lower interest rate. Whoever pull your credit ask them what you can do to get higher credit score. They can suggest you.
1 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
@Harjeet Bhatti thanks for replying. The problem is i need cash to pay for my credit card balance to fix my credit score.. the lender has told me that there is nothing he can do since my credit score is too low. Should i talk to more lenders?
0 Reply
Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
8y
@Chanh Tran you may want to consider renting the unit out now, use income to help pay down your debt. If you don't have a place to live maybe rent out bedrooms. I think it is most important you lower debt.
973-975-3895
House Hacking New Jersey563 Reviews
Website View Page
1 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
@Shawn i will rent it out shortly, but i just want to make sure that i can also cash out to purchase my next property.
0 Reply
Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
8y
Use a commercial lender. They'll focused more on the asset than you. You'll pay a higher interest rate but you'll be able to get the cash you need
1 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
Thanks Jason DiClemente . Do you have any commercial lenders that you recommend?
0 Reply
Paige Kelsey
Rental Property Investor · Vancouver, WA · Member since 2015 · 112 posts · 142 votes
8y
SELLl! You would have made at least 30k . You can pay off debt and be ready with more cash for the next deal. It is not always possible to Brrrr from the first one. Many people will do a few flips to up their capital to the buy and hold but mostly as they do they are building relationships with local banks, credit scores go up and they get a line of credit fron the bank.
or.......go with a 2nd- home improvement loan and try to get that for the debt that you owe on you cc. It will at least be at a lower rate.
3 Reply
Craig Combs
Union, NJ · Member since 2018 · 11 posts · 6 votes
8y
I would look for a new lender. I have a 650 and lenders are fighting to get my business for a cash out. Valley’s National has a program where you pay 899 for all closing costs including an appraisal.
1 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
@Paige: thanks. I’m thinking about selling it too if i can not find a way to refinance it. @Craig: Thanks. i will def check it out.
0 Reply
Lauren C.Pro Member
Rental Property Investor · Hamilton Township, NJ · Member since 2012 · 211 posts · 149 votes
8y
@Chanh Tran I had a similar problem, low credit score due to high credit card debt from renovations. My lender had me write a dated/signed letter stating that I would use the cash-out funds to pay off the credit card debt before anything else. Perhaps propose that option to your lender.
2 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
Lauren C. Thanks !!! I will ask my lender to see if they are ok with it. Would you mind let me know what lender did you use in case mine doesn’t do it?
0 Reply
Lauren C.Pro Member
Rental Property Investor · Hamilton Township, NJ · Member since 2012 · 211 posts · 149 votes
8y
@Chanh Tran 1st Colonial Bank in Cherry Hill. Good luck!
1 Reply
Chanh Tran
OP
Camden, NJ · Member since 2014 · 9 posts · 2 votes
8y
Lauren C. Thankss.
0 Reply
Rachel Luoto
Lake Oswego, OR · Member since 2015 · 174 posts · 115 votes
8y
Have you asked your credit card to raise your limit? Using too much of your credit limit is one of the big 3 (out of5) ways to hurt your score - credit karma and credit sesame can show you where exactly your score is hurting. So if you’re using 80% of the cards limit it’s bad, and you can either pay it down, or you can see if they’ll raise your limit (which so long as you haven’t been in default is often in their interest - they want you to charge as much as possible so long as you remain able to prove you can pay it back)
0 Reply
Odie Ayaga
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
8y
@Lauren C. didn't know you were with 1st Colonial as well
1 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
8y
Originally posted by @Odie Ayaga:
@Lauren C. didn't know you were with 1st Colonial as well
@Justin Eaton - 1st Colonial is one of the banks we need for the panel. If you're doing real estate in South Jersey...they are the go to.
Podcast Guest on Show #312
2 Reply
Mayer M.
Investor · Cherry Hill, NJ · Member since 2016 · 860 posts · 324 votes
8y
Does anyone have any good contacts for a cash out refinance on 14 residential investment properties?
0 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
8y
Originally posted by @Mayer M.:

Does anyone have any good contacts for a cash out refinance on 14 residential investment properties?
If the properties are located in South Jersey try 1st Colonial. If they can't work with you or the properties are in the Philly metro area than check with American Heritage FCU
Podcast Guest on Show #312
1 Reply
Justin Eaton
Engineer · Magnolia, NJ · Member since 2016 · 133 posts · 135 votes
8y
Originally posted by @James Masotti:

Originally posted by @Odie Ayaga:

@Lauren C. didn't know you were with 1st Colonial as well
@Justin Eaton - 1st Colonial is one of the banks we need for the panel. If you're doing real estate in South Jersey...they are the go to.
Definitely, i just did a home inspection for Jerry Silvi who is another residential lender at 1st colonial, small world. But yea, i have three connects over there. Anyone can feel free to DM me and i will forward you their info. Two of them are residential lenders and one is a commercial lender.
0 Reply
Stephen Kappre
Real Estate Agent · South Jersey · Member since 2017 · 252 posts · 143 votes
8y
Crazy I too have a contact at 1st Colonial and was going to suggest. Mayer sounds like our conversation just the other day? :)
0 Reply
Mayer M.
Investor · Cherry Hill, NJ · Member since 2016 · 860 posts · 324 votes
8y
Hey Steve, yes just like our conversation the other day it’s about 14 residential investment properties in South Jersey. I have tons of equity and looking to cash out for other investments. I really just began my search for a lender I have used other lenders in the past with great success and I can go back to them. However, I am looking to make new relationships. These are fully occupied properties with great rent rolls and the partners have a great income and credit history.
0 Reply
Charlie Hampton
Contractor · Franklinville, NJ · Member since 2013 · 183 posts · 86 votes
8y
+1 for 1st Colonial!
1 Reply
Marcus Johnson
Investor · Saint Paul, MN · Member since 2015 · 663 posts · 512 votes
8y
I agree with the last poster, you should sell this property you don’t have any capital, and the proof is in the pudding because you had to put your expenses on the credit card.
1 Reply
Alpesh Parmar
Investor · Dublin, CA · Member since 2016 · 344 posts · 228 votes
8y
Sell the property and get the money back. Put everything back in the credit card and go back ask the CC company to raise the credit limit.
1 Reply
Lauren C.Pro Member
Rental Property Investor · Hamilton Township, NJ · Member since 2012 · 211 posts · 149 votes
8y
Originally posted by @Odie Ayaga:
@Lauren C. didn't know you were with 1st Colonial as well
Yup! Got the contact from @Justin Eaton Had a great experience and got a lower interest rate than was quoted.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.