All Forum Posts by: David P.

Thanks Jeremy, I do have a relationship with a lender and sent him an email regarding this just before this post.

His reply: "On this particular scenario, you would need to wait a minimum of 6 months to have the option to lend on a higher value than what you bought it for at the auction. There is a chance that you can do a cash out refi right after you take ownership, but it would be held to the purchase price of $34,000. This is a Fannie/Freddie rule that all lenders have to follow. There are hard money lenders that will do what you are talking about, but they will come with some hefty rate and fees."

Although the $34K would be fine; I am looking at taking the difference between sale price and apprised value - 20% to receive cash out.

Any other advice would be greatly appreciated; also if you can provide the lender name if they write in Wisconsin would be appreciated.

I am getting ready to purchase a rental property for cash through an on-line auction for $34000. However I want to finance it at current market value "Apprised Value" which is to be expected to be about $75K to $80K. Taking the lower of the two amounts $75K and with LTV of 80%, the loan would be about $60K. This would leave $26K for my next deal, if I can take cash out.

Some the research indicates that lenders are requiring "seasoning" for investment properties loans, meaning that I must be on the title for 6 months before I can finance the property. I am purchasing this property under my name, however I want to move it into an LLC for asset protection; would I then have to wait for the 6 months prior to financing the property?

Please note: I currently have 5 loans (1 home - 4 rental properties)

I know flippers/wholesalers do this with hard money loans; but I don't see how this is any different, except I want to keep the property for cash flow.

Any advice would be greatly appreciated and thank you in advance