All Forum Posts by: Qiong L.

@Jason Norton Good to know, thanks!

@Ken Naim These are great considerations. For a BRRR, the cash out refi method would certainly be a powerful option, especially if the initial purchase price is relatively affordable.

@Gabe T. Good to know. Thanks!

@Jason Norton Thanks for the input. You mentioned that companies want to do 70% of actual cash that purchaser paid. My impression is that lenders are assessing loan amount based on the appraised value of the property, not necessarily the cash you paid out. Do you have a different experience?

@Gabe T. @Farrukh Amini  Wanted to share some additional details I just learned about repercussions of this approach. One lender I spoke to stated that there's about a .625% cost difference between doing a refinance after an all cash purchase vs. conventional loan. For example on a cash out refinance, if the loan amount is $100K, it would cost $625 more to do a cash out refinance than it would to purchase the home.

LTV is also slightly different depending on property type as well. For example, a two-family investment property can only go up to 70% LTV as opposed to 75% for a single family.

Hope this information helps. 

@Gabe T. Congratulations on your deal! I didn't know about the 6 month window loan initiation. Thanks for sharing that. 

@Farrukh Amini Thanks for your input. That's a good point. Based on my conversation with loan officers, it sounds like 75% LTV for refi can realistic, which may be lower than LTV for a conventional mortgage. Curious if there are other one time fees that will be higher than a conventional mortgage.

Hi BP community. What are your thoughts about doing a cash out refinance after making an all cash offer? Has anyone tried this? All cash offers would certainly increase leverage during the purchase process, but wondering if anyone has insights or lessons to share about this topic. Some loan officers have warned against higher one time fees from cash out refinance compared to conventional fixed mortgages. Curious what we think about this. 

I invest in small multifamilies and learning to assess the mechanicals in any potential property has made a huge difference. Some of my most expensive lessons stemmed from overlooking concerns in the machines and pipework informing the utilities of the property. 

@Dan Powers Thanks for your input. One of the challenges in a new market is connecting with local networks and expertise. Hoping to build more confidence in the Philly market in the coming days. Any recommendations for mailing lists to join, or local virtual meetups?

@Robert Gorra @Rich O'Neill Thank you both for your insights. The paperwork and construction turnaround time still seem reasonable despite COVID related delays. A large chunk of our lost time here in NYC is scheduling for inspection and sign off, but it's encouraging to learn that a near gut reno can be completed within 3 months in Philly and surrounding areas. 

I hear what you're both saying about value add over turnkey. Since I don't have any boots on the ground, I'm trying to get connected with local real estate agents. Being a newbie to the area, it's much harder to get connected to off market deals that provide the most significant return on investment. It's incredible to learn how much prices in Philly have surged from just a year ago compared to now. 

The nearby suburbs are certainly attractive given recent migration out of Philly and other establishment markets. Thank you for your suggestions on where to look. I'll have to do my homework! 

@Jonathan Greene Thank so much for event info. Sounds like exactly what I'm looking for. Will definitely check it out. 

@Rich O'Neill Thanks for the response. In your experience, how long have recent rehab projects been taking from permit to inspection sign off? Due to delays in the construction timeline, I'm wondering how many investors are looking into turnkey properties over BRRR.

Do you have any recommendations for good cash flowing Philly suburbs? I've looked at a number of properties in Philly, but haven't ventured outside the city. Curious to know areas you suggest looking into for BRRR investment.