Refinance Qualification Questions

[Thor Klein]

Hi all,

I'm looking to do my first BRRRR this year but am unclear on the cash out refinance aspect. My main concern is that once the property is rehabbed and rent ready, what qualifications do banks require to refinance?

I've been at my job for only 6 months and know that's usually not enough to qualify for traditional financing. Are most lenders looking at my W-2 history and DTI to determine whether I qualify for the refinance or is it more based on the asset and/or its cash flow?

In other words, should I wait to pursue a BRRRR project until I can qualify for the refinance or are there ways around this hurdle. Any insights would be appreciated, thanks!

[Robin Simon]

Quote from @Thor Klein:

Hi all,

I'm looking to do my first BRRRR this year but am unclear on the cash out refinance aspect. My main concern is that once the property is rehabbed and rent ready, what qualifications do banks require to refinance?

I've been at my job for only 6 months and know that's usually not enough to qualify for traditional financing. Are most lenders looking at my W-2 history and DTI to determine whether I qualify for the refinance or is it more based on the asset and/or its cash flow?

In other words, should I wait to pursue a BRRRR project until I can qualify for the refinance or are there ways around this hurdle. Any insights would be appreciated, thanks!

Hi - check out this article published on BP last year that addresses your exact question - and goes over all the refinance options and pros and cons of each for BRRRR!

https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

DSCR Loans could be a great option for you since there are no DTI requirements or hurdles to worry about