Quicken loans will not re-finance

[Michael Kotyk]

I made an inquiry with Quicken loans online. I was surprised to hear that they will not refinance until 6 months after the initial all cash purchase. This is the first inquiry I made because I am preparing to start investing by BRRR. Is this common because it may slow things down considerably.

[Steven Goldman]

Hi Mike, if you are going to do rehabs I suggest dividing your cash into several down payments and then stage up sequential rehabs. That way the 6 month seasoning requirement, will only slow down your first project. You will incur bridge loan costs, but they will be offset by being able to work to scale. It will also allow you to buy construction materials in bulk giving you some negotiating power with suppliers. Rehab lenders will lend you 85 percent of the purchase price and 100 percent of the construction costs not to exceed 70-75 percent of ARV. If you are buying Tax sales or sheriff sales you should be aware that tax sales create issues with title insurance for up to one year after the sale to allow the redemption periods to expire. Sheriff sales likewise will require 6-12 months seasoning before using a higher value. Good luck

The seasoning period applies to private banks, Hard money lenders and government insured. So their is little or no way around it. When you take on bigger projects it will be less burdensome because the rehab. phase will be 3-6 months anyhow