@Chris Boselli yes, i could be wrong, but I believe he's aware of delayed financing in digging though the further thread replies, but believes this to be a better option. I'd been planning on using the delayed financing exemption, even had the luxury of taking Alexander Felice (BP Podcast 301) out to dinner/brain-pick while he was living here in Las Vegas, he's a great dude & very helpful! The benefit I see to using Andrew's method is two fold: first - your second lender would have been able to do a standard refinance immediately upon good appraisal, second- the rate would be slightly better with no hit for "cash-out" refi, just standard rate & term. Also once the LLC is up, your cost per deal goes down, as you could use the same LLC on each one. I think the biggest win is not having a totally legitimate, yet unfamiliar to some lenders, delayed financing option that may limit pool of final mortgagees.
That does bring up my second hesitation about Memphis though. If $50/month is not the real win, but the $26,0000 you've created in equity; does that equity really exist? If one appraiser's valuation is so far from the other's, sure the higher valuation makes the deal work, but what about the final exit when another investor goes to purchase it so you can 1031 a portfolio into something bigger? 🤔 Will they get the lower valuation that evaporates the equity? I've heard this "certain lenders/certain valuations" situation in asking about Memphis where other BRRRR investors ran into the same issue.
