Another Cash Out Refinance Success

[William Allen]

I wanted to take a few minutes to write a post about my most recent cash out refinance success story.  This post will be two fold, first it will hopefully motivate others to get into buying rentals and refinancing.  Secondly, it will give a big shout out and thank you to the fantastic lender I found here on Bigger Pockets that made it all possible, @Jerry Padilla

I wrote a post about my last refinance success which can be found HERE.  I add that link because I had identified this house when I was waiting to close on the previous refi and I actually closed on this property the day after I got the money from the last one.  Talk about not letting my money sit idle at all.  

Here are the numbers:

This house is a 5 bedroom, 3 bathroom SFR in a great neighborhood. It was brand new construction, the first time I have done that... I bought it for $240k and as the buyers agent, I used my commission to reduce the price to under $235k. I did a few upgrades (countertops and appliances) and was into the house for $240k when it was all said and done.

I rented the house out quickly at $2,100/month 

The appraisal and LTV is where Jerry was most incredible in this transaction. The house initially appraised at $250k but on Jerry's recommendation I sent the appraiser more realistic comps and some of the upgrades that were done. The appraisal was then adjusted to $285k. I already have quite a few loans on my other rentals so I was expecting to be limited to 70% LTV in accordance with the delayed financing exemption rules. However, the closing happened just over 6 months after purchase and Jerry was able to get me a loan at 75% LTV. So, I was expecting $175k cash back but with these two changes Jerry helped make possible I was able to pull out nearly $210k.

That is $35k that went STRAIGHT BACK INTO MY POCKET!  For most of us, that is another house...

So, when it was all said and done I left $25k into the property, added $50k to my net worth in equity, and am making a 15% COC return and 25% return when including principal pay down. I am happy with those numbers.

I have worked with a lot of lenders since I got into real estate in 2009, but Jerry was fantastic.  I will use him again for sure and if anyone is on the fence, do it.  Jerry, thank you and I can't wait to do another one of these soon.  

I already have the next one under contract and it is set to close soon!