All Forum Posts by: Hyeseong Park

Hello,

Based on the information provided, it does appear you would be able to cash out refinance and receive funds, but it is very uncommon for a lender to charge no points for any investment type of mortgage. You can request the lender to pay closing costs out of loan proceeds, but you will have to pay for the appraisal upfront via your funds. 

150k @ 75% LTV = 112.5k
Existing Debt = 84k
Estimated Closing Costs = 3k
Estimated Cash Proceeds = 25.5k (this can be used to calculate your reserves)

If you've only owned the property for just under 6 months, you'd need to go with a non-conventional type of loan unless you want to wait until the 12 month mark to use the new appraised value. Many of those lenders will allow you to use your cash out proceeds to satisfy the requirement for reserves. If you use a debt service loan, you may be cutting it close with the market rents of $1,200 and stated monthly taxes/insurance. It will depend on the rate and LTV you qualify for.

I can't guarantee anything based on the limited info provided, but I have quoted plenty of scenarios that did not require discount points for this type of loan. Happy to answer any other questions, feel free to connect. 

You need 30 good photographs of the house, take them from low so the rooms appear large with bright diffused lighting.

Places to list it:

apartments.com; zillow; craigs list; facebook marketplace

In the listing detail the neighborhood school, amenities, if you are paying for gardener etc., at the end you mention you want someone with 3 or 4 times the rent as monthly income, and great credit. Allow them to see the property as open house with booking eight people to come the same time, 3 will show. Ask them to complete your application form by email BEFORE they come look. Simple form: name, address, email, phone, number of tenants, employer, income. Zillow has a form to pull credit for you, so does apartments.com. You want a 675 score at the lowest. Look at the interior of their car (is it clean?) Call their landlord but double check the address matches their credit and this is a real landlord- or ask for bank statements for six months showing they paid similar rents on time.

@Caroline Gerardo advice is great.

Also, if you don’t want smokers to smoke in your house, you have to mention that in the lease. 

I’d talk about that in person with everyone as they come to see it. It can be listed as just part of the features of the house. 

There are lenders who will do what you want but they charge more upfront and in prepay to cover the possible loss.

Cancel the listing, get it earning income with an excellent tenant and wait two and a half more months to start the cash out refinance.

It costs a lender $11000 to set up a loan they do not want you to continue to try and sell and pay them off early as they lose money.

Many lenders are not going to like that you listed for sale in MLS.

Some nonQM lenders will add a prepayment penalty because of being listed and you need a rental agreement and deposit Before you close. They will require the listing cancelled you can't do both at the same time.

If it didn't sell, then the value is less than you think. Get the comparables to provide to the appraiser- sold last three months, similar type and size past three months.

Hi @Hyeseong Park, from what I understand of your purchase, it was under your name not a LLC, right?

If so, and since you live in PA, you can check S&T Bank or First National Bank and see what they can do.   

I looked in DSCR loans, and they were expensive! One wanted $37,000, another $26,000 and the last $9950 all so I could get the $180,000 I need to finish my rehab on a rental loan. Also, they varied in term from six months to a year. So, if I the work was not done in the stated terms, they would get the property. I know you have finished your rehab so this isn't a consideration for you.

Ideally that would seem to be enough time.  But, in my area, work moves slowly.  So, that wasn't a great option as the stress I would be under with no control would have been astronomical.  

First National Bank gave me a loan that I got from the equity on my current house, $108,500 for $0 out of my pocket.  There were no fees, points, nothing.  

S&T Bank is giving me the remaining loan, $92,000 for a $90 appraisal fee.  This is coming from the equity in my rental.  

I've got good credit, so that helps, but you have a finished, ready to go house!  First National Bank would have given me a loan on the rental had it been livable.  So, I'm sure you could get a good loan from them since yours is livable.  And, it will probably cost you nothing.  

Did I mention my interest rate from First National Bank is at 5.39%?

I called lots of banks, hard money lenders and brokers and none could compare to these two in my area.  

Make certain to pull the amount of money out that the rent can cover, along with taxes, insurance, maintenance and capital savings.  So, in essence, that loan and the care of the house will be paid for by the renter.  The money you pull out from the loan can then be used to buy another house!

By the way, WAY TO GO!  You did it!  You bought a house with cash!  You fixed it up with cash!  You've created a free and clear source of revenue!  OUTSTANDING!  

You must be so proud of yourself!  WELL DONE!