Making your cash purchase a mortgage to decrease seasoning period

[Stephen Keighery]

Hey BP Community,

I have done over 20 BRRRR's so far and love the strategy. I have been buying all cash and need to wait 6 months for the refinance company to use the appraised value when applying the LTV for the refinance. The majority of these finance companies will allow you to use the appraised value after 3 months if there is an existing mortgage. Most people tell me to do the cash purchase as a mortgage so I can refinance faster. I do have several LLCs but they say I can't be one of the members and I should do the mortgage in a friends name.

Has anyone done this? I am looking for advise on how to structure this to ensure that the mortgage payout comes back to me and to ensure whoever holds the mortgage doesn't have any tax implications from this.  Any advise or things to think about would be appreciated. 

[Andrew Postell]

@Stephen Keighery I see that @Ron Brady provided the link to the article I wrote.  Read that and reach out with any questions on it.  We have been using that strategy for years at this point.  But I also agree that there might be other lenders that don't require you to wait 6 months.  The 6 month thing is a Fannie/Freddie waiting period.  Now, other loans types have that limitation (and some with even LONGER limitations) but we usually want to work with the non-Fannie/Freddie lenders that provide less than 6 months.  Anyway, read through it and post anything else you may need.  Thanks!