Cash out refinance on BRRRR

[Gina Shumway]

I am set to close on a BRRRR property with a series LLC on 4/17/2023 (with cash). Our LLC funds all the Renovations in cash as well. This is our second BRRRR property. Renovations should be done in 4-6 weeks.

This property is in chattanooga TN.

I am searching for lenders on a cash out refinance. I'm really hoping for 80% LTV. Since it's an LLC I assume we can only get a DSCR loan. Our first loan did not have a seasoning period, which was wonderful. I would love that bonus again if possible. If you are a lender who could help me with this, please contact me.

[Stephanie P.]

Quote from @Gina Shumway:

I am set to close on a BRRRR property with a series LLC on 4/17/2023 (with cash). Our LLC funds all the Renovations in cash as well. This is our second BRRRR property. Renovations should be done in 4-6 weeks.

This property is in chattanooga TN.

I am searching for lenders on a cash out refinance. I'm really hoping for 80% LTV. Since it's an LLC I assume we can only get a DSCR loan. Our first loan did not have a seasoning period, which was wonderful. I would love that bonus again if possible. If you are a lender who could help me with this, please contact me.

 Hey Gina

Structure is really important on these type of purchases where you plan to do the refinance to get your cash back out quickly.

Most DSCR lenders require a 6 month seasoning period to use the new appraised value after renovation for the refinance. Some go down to 3 months for cash out.

If you are okay with leaving a large portion of your cash in the property, you can cash out right away up to the purchase price (minus 25% typically).  The purchase price would be the amount used for the refinance up to 75% loan to value (or the appraised value, whichever is less).

When I say structure is important, some lenders will allow you to add in verified renovations to increase the purchase price.  They definitely will if you pay them out to a contractor on the initial settlement statement.  For example, if you have a contractor that's going to renovate the property you're purchasing for say 100K and you have the cash to pay him, put it on the settlement statement and have the attorney escrow it so you pay the money, but the contractor doesn't get it until he performs the work.