Loan rates when brrrr

[Andi Leka]

Hello everyone, I'm Andi and this is my first day here.

I have been doing a lot of research lately and i really like the BRRRR method but don't know all the details yet. Do you guys know what are the loan rates if i buy a house in cash then cash out to invest in another house ?

[David Kelly]

Hi Andi, 

You can pay for a home cash, and immediately do a cash out refinance to recoup that cash. This is what is called Delayed financing. You can read all about it if you google it and put in fannie or freddie along with the search. Basically, if you aquired that cash from a HELOC, or other type of financing you will need to pay off that within the cash out refinance before you can actually get the remaining available credit. If the money was in your bank account, and seasoned for 60 days, then all of that can be recouped immediately. I just did this for someone here on BP last month on three properties. The rate is based on cash out rates. These are slightly higher than a rate/term refinance. Is this a primary residence or is this an investment property?