Cash Out Refinance Seasonal Period

[Gabriel Garcia]

Hey All,

Needing some information/assistance.

Purchased a 4plex 30 days ago for $350k, it appraised as is for $400k.

Only one unit was occupied and rented out at $600.

We’ve since renovated all the units with our own money and have 4 leases in place at $950 each.

We’re on day 35 on having this loan and interested in knowing if there are lenders that would do a cash out refi at a 80-90 ltv, without a seasonal period?

How will it appraise if from a comps standpoint there hasn’t been any other 4plexes that have sold since the time of purchase?

Thanks in advance.

[Alex Bekeza]

@Gabriel Garcia

You'll be hard pressed to find anything above 75% cash out and even harder pressed to find someone willing to do before 90 days of ownership.

Maximum cash out will most likely be 70-75% depending on subject property's DSCR at today's rates.

1-4 unit properties will always need to be based on sales comps.  It's fine if nothing has sold in the last 35 days because the appraiser can look back further than that.  Based on how new this is I'd imagine you'll see the same comps used in that first appraisal if it was only a month ago and no other sales have occurred.  You're close enough to 90 days at this point that you could probably get with a LO to order the appraisal, title, etc and start coordinating everything to be ready for underwriting and an approval to fund as close to your 90 day mark as possible. My understanding is that Arkansas still has a lot of upward pressure on price whereas many other parts of the country are facing declining values so you should be fine as long as there are reasonable comps within the last 6-9 months or so.