How do I Cash out Refi?

[Ivan Perezvilla]

Hello everyone first time posting. Quick background. I own two duplexs that I purchased through conventional financing so my DTI is pretty tapped out. That being said i want to BRRRR my next property (or 10 properties)! I have a hard money lender that will finance the purchase and full rehab so i can more or less pay cash for everything.

I am struggling now though to find a bank or CU that will refinance the home to pay back the HML and move onto the next project.

They all have said they need full doc cash out refis with a 6 month seasoning or longer and they all will take my own DTI into account. Which i understand is normal but am i just not finding the right lending institutions?

My HML will also partner with me but she excels in flipping, but I want to retain the homes as LTR, so I'd rather not sell if I don't have to.

Long story short, if i find the right property i can purchase it all cash and pay for a full gut rehab and now i own a home free and clear that is full rehabbed. How do i find a bank or lending institution that will allow for me to cash out refinance on that property at 75% (or more) so as to pay back the HML and put a few dollars in my pocket?

Thank you all in advance!

[Riaz Gillani]

DSCR! There's plenty of lenders out there so I'll leave that part t you. But, as a primer ... No DTI requirement. No Income Verification, No Employment Requirements - these are for creditworthy borrowers who are self-employed, have lots of assets but limited income or even people with a lot of debt in their name (think full-time RE people).

By barring those initial otherwise qualifying measurements - the cash flows of the property become a primary determinant for qualification. They are generally 30 Yr Loans (Fixed, IO, ARM, etc.) and using an LLC is ok.

Like I mentioned, credit must be checked but can be as low as 640 in most cases. Possibly even lower. Seasoning requirement is at least 90 days. For max cash out without restrictions / conditions - 180 days.

The main drawbacks would be marginally higher rates (50-75 bps higher), always some kind of prepayment penalty, and because the asset is the primary function of the loan - a non-cash flowing property (maybe lux or bad market) may not qualify.

Be careful who you trust in the space and place the most stock in synergy and communication (not rates or 'fast closing.')