Thank you all for the responses:
Jon, it was a Fannie Mae REO so it has 90 day seasoning. I expected the rehab to be done by this point, but some issues have come up that have delayed the project a bit. I would just want to refi to be out of the hard money as the terms are quite steep. I wouldn't want to do a cash out; just term and rate so if the house doesn't sell (it is my first flip; trying to be conservative on all fronts) I will already be in position to rent out if necessary. The hard money charges 2 points (1500) for every 2 months to continue the loan. At that rate, if the house is not sold around month 8, I begin to lose profit fast as I would be stuck in the hard money loan because as you said, the house would be listed at that point and I couldn't refi at that point.
Bryan, thank you for your advice!
Ophellia; you are a wealth of information, THANK YOU. If you could check on that 120 day after refi for me in your spare time that would be GREAT! I accounted for the mortgage payments you mentioned through 8 months (again, trying to be conservative). There is no prepayment penalty listed on the Good Faith Estimate. I absolutely am to the point where I believe this broker is not a friend; but I am knee deep at this point and want to take the safest route. The 78k includes the rehab costs. My hopeful ARV is actually 120k, comps support this. I listed 115 to be safe. At this point I've taken in to account all my holding costs through 8 months, as well as purchase, rehab, and selling costs, and I still stand to make 10-14k on this if I can get it sold by month 8. My worst fear is I don't refi out of this hard money loan, it doesn't sell, and I'm getting hit with 2 points every 2 months which over time would sink the ship.
My thoughts at this point are to hardball him back down to the closing costs he originally stated, refi, sell, and never use him again.
Keep it coming my friends, I really appreciate the advice/support.
