Buy, Fix, and Hold - HML refi to 30 yr
I have been thinking about a buy, fix, and hold strategy as of late. I know it can be done, but I'm trying my best to figure how much money it will actually take to execute. The idea is to buy wholesale with a hard money loan that is 65% - 70% LTV (includes acquisition money as well as rehab money), fix it up and get a renter in it, then refinance to a 30 year fixed rate mortgage with a bank.
Factors I know I need to accommodate for:
- HML points up front
- HML interest only payments (monthly)
- Utilities
- Insurance
- Prorated property taxes (for the period before escrow is set up on the 30 year loan)
- Loan origination fees (if these are not rolled into the loan)
I have a near perfect credit score and zero debt, save for the revolving credit on my card, but that is paid in full every two weeks.
My questions:
1) How much LTV could I reasonably refinance out to? Last time I spoke with a mortgage broker in earnest, I could get 80% but that was on a straight MLS purchase, not for a refinance from hard money. Does that make a difference?
2) Is seasoning likely to be an issue? How long will a bank want me to hold the property before the refinance?
3) Am I missing any factors?
It seems like I should be able to get a 75% - 80% LTV refinance, and that would put my net out of pocket expenses to be extremely low when everything is all said and done - perhaps under $10k for a house worth more than $100k.
Thoughts?