All Forum Posts by: Priscilla C.

It's a judgement call, some people pull out as much equity as a lender will let them. In my case I've stayed more conservative with 65% LTV and high cashflow. This slows down your acquisition of new property, but isn't as stressful when interest rates go up or if you have vacancy. Also I prefer more cashflow over more properties. I have 3 single family units, probably will be 4 by the end of summer and net cashflow should be about 6k a month. The tradeoff to this is that it's taken 5 years, with a high income job to pay for down payments.

You could probably go as high as borrowing up to 80% of the after repair value (ARV.) 0.8*165,000=$132,000. But you don't have to borrow that much. If having a lower monthly payment is more important to you than getting as much equity (money) out of the property as you can, then borrow less. It's not that the bank "offers" you a certain mortgage amount, it's that you apply for a mortgage of a certain amount. The maximum is the bank's decision (80% of the ARV), but the amount you apply for is your decision.

Unless interest rates are significantly lower on a 15 year, you really would always want to go with a 30 year if available. You can always pay down more principle on a 30 year every month, but you certainly can't pay less a month on a 15 year :-D

Sorry, I just typed it wrong: LTV. I am dyslexic and mess up letters a lot. Spell check does not always catch that stuff. 30 year is safer. Are you going to move into it?

The MLS of the location you're looking for

Facebook groups for RE in the location you're looking for where wholesalers post

Hi Pricilla,

There is no down payment on a refinance (only for purchase) but you have to "leave equity" in the house when you refinance a house bought with cash.

When you do a cash out refinance, your closing costs will be subtracted out of the refinance loan, so no you do not come with any cash to the closing table.

Yes, you can use the cash out proceeds from the proceeds to buy another property.

Hey Priscilla, yes, it works this way as long as you buy the property with 20% to 25% margin. Basically ARV x 80% or 75% - Repairs When purchasing the property and paying for repairs with cash. If you use hard money on the other hand, you will need to be at ARV x 75% or 70% - Repairs. Hope this helps! Let me know if I can help you in Memphis TN!

Quote from @Priscilla C.:

Quote from @Matthew Becker:

It depends.  After you rehab it you should be able to get a loan with a 80% LVT.  So if it apprasies at $165K your loan would be for $132K.  

I am not sure where the $401 a month comes from.  Your payment will just be based on Taxes, insurance and the loan payment.  

Can you clarify?   

Ok going off of this example 

• Purchase Price: $100,000
• Rehab Costs: $50,000
• After Repair Value (ARV): $200,000
• 80% LTV: If a lender allows an 80% LTV, the investor can refinance for $160,000 (80% of $200,000).

So following this example would this mean my new mortgage is going to be based on $160,000 so let’s say for a 15 year loan I would be expecting to pay around $1,300 - $1,500 a month? I would not be paying a mortgage on the appraised value of $200,000 correct? yeah to clarify the $401 a month I just based it off a general search on a $50,000 mortgage…

 Yep, you got it. If you can hit those numbers you are doing awesome. The lender should be OK with 80% LVT if you have enough rent to cover the payment plus expenses. A commercial lender looks at debt coverage of 1.2 to 1.25. A standard refinance will look more at your income.  

Is there a reason why you want to do a 15-year AM?  Unless cash flow does not matter and you can rent for enough to cover all cost.  The interest rates for 15 and 30 years are different.  Notes held in-house at a credit union or community bank are sometimes lower.  

let's say you buy a home for $50k cash and put $100k into it. So your out of pocket $150k. You would want it to appraise for $200k (assuming they require 20% down + closing costs)

so you would then have a $200k loan but have received your $150k back to do it all again. 
you could also do this with a bridge fix and flip loan as well. Doesn't need to have the $150k but a portion of it.