Risks and ContingenciesWhat happens if I can’t sell or refinance the property within the loan term?

Completed the reno and did a cash out refinance in June 2024 to 8% and added an ADU with the cash out.

You can refinance into more traditional loans later, but that initial speed matters.

Plenty of ways to structure financing with earn outs on the construction to permanent loans without even having to refinance or use hard money which would reduce the transactional costs below what you've quoted in your examples. 

Will I only be able to mortgage the purchase price and costs, or will I be able to do a full cash out refinance and tap into some of the added equity of renovations?

Many lessons have been learned firstly is you can’t be too nice or trusting and second is, don’t wait to figure out the refinance and cash out process and until you are almost done with rehabbing the property because currently going through a very lengthy, cash out refinance ordeal at the moment as I’m trying to get financing terms finalized as we speak.

There are multiple ways to utilize equity without paying taxes, such as cash-out refinances, HELOCs, and 1031 exchanges, making appreciation a powerful wealth-building tool.Many people lump all of California into one bucket, but it’s a massive state with many distinct markets.

Second, we’ve refined our screening process for the clients we bring on.

I'm curious about what bank is the best bank to do a cashout refinance with.

But would I tell a person I don't know to find and buy a severely distressed property, take out a hard money loan to buy it, perform a monster rehab, and then refinance and hope for the best?