Recently Purchased Duplex -Refinance Questions/General Networking

[Brett Dawson]

Hi all,

I purchased my first property recently in the Tremont area. It is an owner occupied duplex that I am currently renovating myself (about $40k worth of rehab) and one of the things I am sort of anxious about is the refinance process.  I would like to find a cash out lender worth the value of my new appraised value when all is said and done but this is where things get cloudy for me.  I understand all repairs/enhancements I make need to be to maximize the re-appraisal value.  For those who have done this before is there anything I should know specifically regarding our Cleveland market?  Or any dos/don'ts of the process?  I would think with the current state of the market refinancing cash out loans is harder to find.  I have good credit as well (760+) not sure if that makes too much of a difference these days. 

Extra info about me:
My long term goal is to follow the BRRRR method generally (like most people it seems) trying to buy a new property every 18 months or so. I am brand new to all this and understand I know very little compared to those who have done this many times over. I am fortunately in a situation where I can do almost all rehab myself without the need for contractors. I would love to connect with those who have been down this road, especially if anyone has started off with an owner occupied duplex and has any advice! I have also checked out https://www.greaterclevelandreia.com and plan to join, if anyone is a member and has any anecdotal opinions/info about this I would love to hear it as well.

Thanks!

-Brett

[Carmen Pellegrino]

Hi Brett we live in North Ridgeville and have 3 properties soon to be 4 in Ashtabula county. I have not completed the BRRRR yet but that is my plan. I have the same concerns you do and am worried about the appraisal on refinance. I know the 25% down for multi still applies if its not owner occupied. Also if its currently financed you sometimes will find lenders have a hold period before you can refi again. My lender is 6 months so keep that in mind. Also she is saying refi is higher interest rate but not too much. Need signed leases as well to help with income to debt if needed.

My current concern is we are bought with loan, put cash in to rehab and then in 6 months want to refi after its rented. I am worried the appraisal will be low or the tenants will tear things up lowering the appraisal. The appraisal is the biggest 'x' factor to get our cash back out of the deal. 

By the way I would think if you do the BRRRR method you could buy more than 1 every 18 months! Read BRRRR by David Green.

I think on the next deal we are going to try cash buy, rent and refi ASAP because a cash buy only requires a 30 day hold. I can turn the BRRRR much faster.

Sorry if my number of R's in BRRRR is off!