All Forum Posts by: Cooper Reece

It will likely raise red flags among your lender. Also, you can’t cash out refi based on the increased value for 6 months. In other words, if you buy property 3 for $200k and put some work into it and 3 months later it’s now worth $300k, the bank won’t loan on the $300k until 6 months have gone by since the purchase. The refi would still be based on the $200k purchase price. This is a “cool off” period that was implemented after 2008 on cash out refis. Otherwise, my understanding is that if you live in the property or intend to do so very soon upon securing the financing, it can be considered a “primary residence” but I’m neither an attorney nor a mortgage broker so don’t rely on my opinion... Again, numerous “primary” purchases in a short span of time might get you more attention than you’d like... 

Hello,

I just bought a duplex all cash. I'm currently financing it (considered a cash-out refi even though I don't already have a loan), but will want to cash-out refi again after I can fix it up, bump rents, and create some value. Essentially BRRR. Although my current lender is offering a 75% LTV, it's a commercial loan so it's a 25 year amortization. I'm curious if anyone knows of any lenders in the Central Florida area that are offering Conventional 30 year cash-out refinance loans on duplex investment properties above 70% LTV? Most conventional lenders will only go to 70% LTV because of these three criteria: (1) it's a cash-out refi (2) it's a duplex (3) it's an investment property. Anything agency-backed has to be 70 LTV for these criteria I believe. But I'm curious if there are any lenders that don't have to follow these specific guidelines and can move on LTV and offer a 30 year term?

Thanks!

Hey there, that’s typically my goal as well. After all expenses, vacancy, and my mortgage payment I want a return close to 10% on my equity. Not sure where you are located but I’m in central FL and deals like that are hard to find unless you find something that needs some work and you are willing to take on a little risk to do some rehabbing and bump rents. That being said, I have yet to find ANY deal that has good enough returns where I could afford to pay a property manager and still get an 8% coc return. Prices are just too high relative to rents in my area. 

 What’s the purchase price? Are you putting any money down or is the seller financing 100% of your equity? Sounds like you are making $450 prior to accounting for vacancy, repairs, maintenance, etc. Probably more like $250 per month on average at the end of the day I would assume? So about $3,000 per year for the long term rental option? My main reference point is return on equity... How much cash flow am I making relative to my equity in the deal. Of course you can refi out after the Reno, but you still have to maintain 25% equity per most lender requirements so if the seller financed most of your equity you’ll possibly have to write a check at refi. 

I appreciate the feedback, Matt. Would you care to share some numbers from a recent deal you have worked on so I can see where you are coming from? Much appreciated! 

Matt, appreciate your reply. Single family opportunities have been even harder to come by in my experience. The gross rent to purchase price is an even lower ratio on single family homes, based on what I have seen. For instance, while I’m seeing duplexes that might provide 2400 in gross rent and sell for 350-400k (in College Park), a house that costs that much will produce less cash flow like 2k or less.  However, I am exploring other areas and branching out from just central Orlando. 

Hello, I’m struggling to find deals that will cash flow well in Orlando. I currently own one triplex in College Park that I bought in 2018 and I house hack. I have been on the hunt since then to find a second deal and nothing seems to come close to a 10% cash on cash deal. I’m mostly looking for duplexes/triplexes/quadplexes anywhere in central FL. Most stuff I see, after accounting for the mortgage, taxes, insurance, and estimated repairs/maintenance, would yield something like 4-5% cash on cash, and that doesn’t even include using an outside management company!! For me personally, I would rather avoid the headache and keep my money in the stock market. Also, anything that’s a decent property typically gets bid up quickly or receives a ridiculous offer (last one I went for went under contract for 25k above ask and NO inspection period!). Am I missing something here? Personally, I think appreciation is great, but to me it’s icing on the cake. Cash flow is king. I want to hold for the long term and live off the cash flow. I have been calling on owners to see if they are interested in selling to try and get something off market but not too much luck so far. Any suggestions?

Hey there, I'm looking at buying another duplex in Orlando as an investment property and curious if anyone's got a good feel on where rates are right now for these? I know single family primary residences are in the mid 2's and an investment property is usually 1-1.5 points higher, but I've heard everything from my local banking relationships from 3.24% APR @ 75% LTV to 5.125% APR @ 80% LTV (which is absurd) so I'm just curious if anyone's got some real experience in the Central FL market lately on purchasing a 2-4 unit deal as an investment property and what rate they got @ what LTV. I currently own a triplex, live in one unit rent the other two, don't have much debt other than my mortgage, and have at least 2x the cash needed for a 20% down payment on this duplex I'm looking at, so I should be a favorable borrower in a lender's eyes. Feedback is much appreciated. Thanks!

I'm an active investor in Orlando and know other active investors in town. What area of town is the house in?