Delayed financing question

[Ryan Keenan]

Hello BP, doing some research on delayed financing when purchasing with cash and cashing out some money under 6 months. Are investors doing this and then cashing out the remainder after 6 months? Doesn't that cost more money closing 3 times? How do they get the rehab money back? Not sure i see the point yet or how to properly use it? Thanks! Ryan

[Michael Noto]

@Ryan Keenan The commercial loan route will always be the path of least resistance and quicker when cash out refinancing, but that will come at a cost typically. Higher rates, different terms, probably higher closing costs than conventional. You can also get the loan in a LLC which you can't do with conventional. Not sure if that is a big deal for you or not.

With conventional cash out refinancing you will get a better rate, probably less closing costs, but there will be more hoops to jump through to get the loan and typically more of a seasoning requirement. You will also have to own in your perosnal name.

To me the choice comes down to how fast do you need to move your money in and out of the project to hit your goals. If you are trying to accumulate properties at a good pace than I would seriously consider commercial.