Long term financing with little to NO seasoning period

Philadelphia, Pennsylvania
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Long term financing with little to NO seasoning period

Jessica Stern
Member since 2023 · 31 posts · 27 votes

Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!

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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Quote from @Jessica Stern:

Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!


 Hi Jessica, 

You can do no seasoning on a rate and term refinance (just pay off the hard money loan) or up to 75% on a delayed purchase refinance limited to 75% of the PP and rehab cost or Appraised value (whichever is lower)

[email protected]818-269-7983
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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    some DSCR lenders will do 90 days but will give better rates for 6 months. if you're rehabbing, though, won't it take 3-6 months?

    2Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y
    Quote from @Nicholas L.:

    some DSCR lenders will do 90 days but will give better rates for 6 months. if you're rehabbing, though, won't it take 3-6 months?


     The rehab will take 4 weeks or less 

    1Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y
    Quote from @Jessica Stern:
    Quote from @Nicholas L.:

    some DSCR lenders will do 90 days but will give better rates for 6 months. if you're rehabbing, though, won't it take 3-6 months?


     The rehab will take 4 weeks or less 

     That's an incredibly fast rehab. 

    On the refi side you can't have your cake and eat it too. Conventional fixed rate debt will have the 6 months seasoning, but you'll get the best terms and rate. DSCR loans come with a few cons but you can refi faster. It's up your strategy and cost to stay in HM. It's nearly impossible to eliminate the seasoning period.

    1Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y

    That makes sense! Thank you

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Jessica Stern

    i have to ask... you're doing a 4-week rehab that's going to let you refinance and pay off a HML?

    2Reply
  • Matthew DaviesBusiness Member
    Lender · Tampa, FL · Member since 2023 · 22 posts · 6 votes
    3y
    Quote from @Jessica Stern:

    Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!


    Nice work getting in and out! Typically, DSCR seasoning periods are three to six months based on the lender. However, some lenders do provide strong "delayed purchase" options which utilizes the new "ARV" as long as the loan amount does not exceed the purchase price + verifiable rehab. Seasoning is only one month. Its worth noting that DSCR lenders can have a minimum property value of $100,000, so you'd need to jump that hurdle also.

    [email protected]
    0Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y
    Quote from @Nicholas L.:

    @Jessica Stern

    i have to ask... you're doing a 4-week rehab that's going to let you refinance and pay off a HML?


    0Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y
    Quote from @Jessica Stern:
    Quote from @Nicholas L.:

    @Jessica Stern

    i have to ask... you're doing a 4-week rehab that's going to let you refinance and pay off a HML?



    Yes but it's not a perfect BRRRR. I'll leave some money in the deal. I just love the location and long term potential (and it will cash flow, not a lot but net positive!)

    1Reply
  • Debbie FalesBusiness Member
    Lender · Annapolis, MD · Member since 2018 · 141 posts · 47 votes
    3y

    Often, lenders will consider using a newer (after rehab) appraisal if at least three to six months have passed since you bought the property. This also assumes verification that the improvements have been made. This three to six months of seasoning allows the lender to reduce the risk in leveraging the property and pass along a more competitive rate and better terms to you.

    Best of luck!

    [email protected]888-444-3160
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    1Reply
  • Yocheved Beer
    Member since 2022 · 72 posts · 10 votes
    3y

    @Jessica Stern could you give us the numbers on the brrr?

    0Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y
    Quote from @Yocheved Beer:

    @Jessica Stern could you give us the numbers on the brrr?


     Purchase price $148k

    Rehab $76k

    ARV $275k

    0Reply
  • Matthew DaviesBusiness Member
    Lender · Tampa, FL · Member since 2023 · 22 posts · 6 votes
    3y
    Quote from @Jessica Stern:
    Quote from @Yocheved Beer:

    @Jessica Stern could you give us the numbers on the brrr?


     Purchase price $148k

    Rehab $76k

    ARV $275k

    Thanks for sharing @Jessica Stern. What was your total loan amount with the HML - if you're open to sharing? With those numbers, you'd be able to qualify for full leverage on the new value after one month of seasoning. Cashflow will also be important - I hope you can find a good tenant!

    [email protected]
    0Reply
  • Jessica Stern
    OP
    Member since 2023 · 31 posts · 27 votes
    3y
    Quote from @Matthew Davies:
    Quote from @Jessica Stern:
    Quote from @Yocheved Beer:

    @Jessica Stern could you give us the numbers on the brrr?


     Purchase price $148k

    Rehab $76k

    ARV $275k

    Thanks for sharing @Jessica Stern. What was your total loan amount with the HML - if you're open to sharing? With those numbers, you'd be able to qualify for full leverage on the new value after one month of seasoning. Cashflow will also be important - I hope you can find a good tenant!


    Which lender would require only month of seasoning?  

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Jessica Stern:

    Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!


     Hi Jessica, 

    You can do no seasoning on a rate and term refinance (just pay off the hard money loan) or up to 75% on a delayed purchase refinance limited to 75% of the PP and rehab cost or Appraised value (whichever is lower)

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    2Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y

    On a rate and term refi, you can go up to 80% LTV and the max cash out cannot exceed $5,000.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Erik Estrada:
    Quote from @Jessica Stern:

    Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!


     Hi Jessica, 

    You can do no seasoning on a rate and term refinance (just pay off the hard money loan) or up to 75% on a delayed purchase refinance limited to 75% of the PP and rehab cost or Appraised value (whichever is lower)


    Accurate here - if you don't take cash-out (rate-term refinance), no seasoning restrictions will typically apply. If you are looking at a cash-out refinance, looking at 3 months seasoning minimum most likely, although most DSCR Lenders are at 6 months and conventional is now at 12 months

    [email protected]
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    1Reply
  • Rami Khaldi
    Philadelphia, PA · Member since 2022 · 46 posts · 38 votes
    3y

    I have a lender who I met through my broker that's helping me refi into a conventional after 90 days. Feel free to reach out, happy to share the broker's info who can make an intro to the lender.

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    3y
    Quote from @Jessica Stern:
    Quote from @Yocheved Beer:

    @Jessica Stern could you give us the numbers on the brrr?


     Purchase price $148k

    Rehab $76k

    ARV $275k


    I have done quite a few successful BRRRR and therefore am not easy to impress with BRRRR execution. However, if you can pull off a $76k rehab in 4 weeks, I am impressed.

    When you indicated 4 week rehab I was thinking it was light rehab (flooring, paint, landscaping).  I was not thinking a 76k rehab.  

    Good luck

    2Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 505 votes
    3y

    There are lenders that have no seasoning requirements if you paid cash and are structuring as a DSCR loan. Loan minimum would be $150K with exceptions that can be made down to $100K.

    [email protected]818-770-0340
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    0Reply
  • Brayden Hrycko
    Lender · Allentown, PA · Member since 2023 · 207 posts · 38 votes
    3y

    Hello @Jessica Stern,

    I know a few DSCR lenders that are 3 month seasoning. Feel free to reach out!!

    0Reply
  • Ryan Stuckey
    Lender · Member since 2022 · 217 posts · 148 votes
    3y
    Quote from @Jessica Stern:

    Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!


    Seasoning is relevant when you want to use an ARV-derived value for the loan amount, i.e. cash-out above your costs due to the value-add achieved. But you can get your (purchase + rehab) costs out at the 3-month mark (or even earlier at a higher rate). So just refinance to get out of your hard-money loan without seasoning as early as possible.

    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    3y
    Quote from @Jessica Stern:

    Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!

     @Jessica Stern   

    The strategy we use all the time which is to give borrowers a bridge loan for your cash out. It is our money and our loan so we do not have any seasoning requirements (assuming a solid appraisal of course)  In that case we would lend you 75% of the appraisal. We would then refi you into a conventional loan right away using the same appraisal. This gets you around the seasoning requirements as they ONLY applies to cash out loans. In this case the conventional loan is NOT cash out, but rather a rate/term refi where you can use the improved value. So, you get your cash out and your fixed rate all right after the property is complete. 

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  • Logan M.
    Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
    3y

    There are many different types of lending that do not care about seasoning if the value is there. Most people that tell you otherwise are typically pushing "in-the-box" options.

    Make sure that you weigh these non-conventional options against waiting longer.

    Another tip is to have your hard money lender cash out everything you can so that when you refi it won't be a cashout refi which gives you worse rates.

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    @Jessica Stern 90 days to use new appraised value for up to 75% cash out in PA via DSCR (no sacrifice in rate compared to 6 months seasoned) ;) 

    [email protected]818-606-8823
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  • Alex Deacon
    Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
    3y

    @Jessica Stern I would work with local lenders in and around Philadelphia. I do all of my investing in Pittsburgh and have the best luck with local banks and credit unions. Because they are familiar with the market, they will be more likely to give you the best terms. This is not always the case but that's what I have learned after refining hundreds of properties.

    1Reply
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