​Chicago BRRR Two Flat

[Frank S.]

BPs,

Can someone ,please, provide me with some "refinance cash-out" references examples in the Chicago Market? I'm interested in actual cases reflecting my market.

We are considering buying a property cash and paying for the repairs out of pocket or through credit cards. Then, we would like to get our equity out either by Delayed Financing or after six months.

Cash 80K

Repairs 20K

ARV 130K -140 depending on repairs and condition

After researching, it seems that if we wait the six months, we can, in theory, get most of our money out.

130K * 0.75 = 97K

The, there are closing costs of course.

With delayed financing, we could refi up to the cost of the property plus closing costs.

Our main concern is that we may not be able to get the money out.  

We understand the bank performs the appraisal, and we think we could hit the ARV stated above. If the appraisal comes low, let's say 100, we could only get up to 75K.

Also, we read that some banks won't allow this if the buyer doesn't have previous landlord experience.  It seems they may require two years of experience. We do not have previous experience and we would hate to have our cash locked for two years.

Any feedback with real examples is greatly appreciated.

Frank 

Keywords

Chicago, Financing, BRR, Rehab, Mortgage, Lending, Cash-Out