Lender Questions - refi and hard money

[Robert Calabro]

1. Are there any lenders that can do a cash-out refi on a brrrr investment property that has less then 6 mo seasoning? 

2. I've recently been given an estimate on a hard money loan. The lender is asking for $2,300 (lender fee) + $600 (appraisal) + 2% of the loan up at an estimated 9-11% interest rate. Do these numbers seem typical? I believe the rate is fine, and the 2% fee, but I'm more skeptical about the $2,300 fee. Thanks,
 

[William Alonso]

Hey Robert, for hard money lenders I’ve worked with a couple and from what I’ve seen, yes, those numbers are pretty typical. I like LendingHome for a hard money lender as they’re easy to work with and have a nice online portal for loading docs and keeping track with the loan progress, but their fees were very similar. 

Most of the small business community lenders I’ve worked with will do cash out but they’re not going to base the cash out on the market value at 6 months. They want to still base everything on the lesser of the of the value based on your rents or how much you’ve put into the property.  For example, if you buy a property for $100,000, and you put $50,000 into rehabbing, and now the value based on comps is $200,000, they will lend about 75% of the $150,000 as they still want you to have that 25% skin in the game, so total loan amount at $112,500. So for a non seasoned property that has less than a years worth of rent you’re not cashing out very much, just recouping some of the money you put in.  This isn’t every lender of course and you may get a difference answer from a conventional lender but I’ve ran into this situation a few times.

Good luck with whatever you choose I hope you find the program that works for you.