Hi all! I'm new to the community and I'm in the knowledge gaining phase of real estate investing. I'm trying to learn BRRRR as best as I can. I have questions on the refinance stage. I understand hard money loans are typically used to buy the property (There's other ways but I'm considering hard money loans at first). These are typically short term loans with higher interest rate. I believe they're expected to be paid off 6-12 months. Once you go through the BRRRR and get to the refinance stage, this is where you refinance and pay off the initial loan. Ideally you should make most of your money back (if not all) with the money left over. Some question I have are the following:
1) Is the cash out refinance usually done with the same lender you did the hard money loan with. Is it common to go to another institution for the refinance?
2) What kind of loan is the refinance typically? Is this more of a conventional type loan?
3)I also see the term rental loan. What is the difference between a rental loan and conventional loan? I was looking at lenders on the BP website and saw one had this for the rental loan description: "RENTAL LOANS: 30-year fixed rate loan on purchase, refinance and cash out refinances. Up to 80% LTV, 30yr interest only, rates start at 3.75%. Quick Closes. No DTI Requirements. Qualify with FICO and DSCR of the property(s)." Sounds a bit similar to a conventional loan but not quite the same to me.
Thanks all in advance!
