[Calc Review] Help me analyze this deal

[Julie Tonioni]

Hi Everyone,

This is my fourth real estate purchase. Unfortunately I think I made some bad choices with initial refinancing. I have used a hard money loan at 12 % and 3 points. My initial thought was we would re-finance after the rehab in one month and I would decrease my interest rate, monthly payment and use the BRRR strategy to get the cash back out for another purchase. However after speaking with Better Mortgage today I learned I can't refinance for 6 months. This significantly changed my monthly cash flow and ROI. I had read the 6 month rule from another member but didn't know it was a rule for all REI transactions (according to Better).

Any advice at this point? 

Thank you,

Julie 

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*This link comes directly from our calculators, based on information input by the member who posted.

[Bill Rich]

@Joe White Thank you!

@Dennis M. the seasoning requirement is actually 6 months not 12 months, just an FYI

@Julie Tonioni unfortunately if you are indeed trying to pull additional cash out above and beyond what you purchased the home for then you would need to have owned the property for 6 months.  This is a Fannie Mae/Freddie Mac guideline and a guideline that 99% of the mortgage industry follows.  You can do delayed financing which allows you to recoup the money you put into the home for the purchase and rehab.  You can however start the application process, get everything in place (loan approval, appraisal etc) so that once the 6 month mark hits you can close immediately once the 6 month mark hits.  I have done this a few times for clients in this position in the past.  Essentially process the entire application and close on day 181 (6 months x 30 days = 180 days). I hope this helps a little and if you have any questions please feel free to reach out to me.  I am licensed in CT and would be happy to help you.