Using transactional funding and refinance!
Hello Investors,
My biggest problem (mostly everyones) is finding the capital to close deals. For example, you know how wholesalers use transactional funding to complete their double close. Can you use transactional funding, then pay back the private money lender with the refinance? Can you refinance a property that is owned with 100% equity and if so have much can I take out?
Most Popular Reply
John,
Most banks these days will require seasoning of the asset before funding a refi (usually at least 6 months) and on a cash out refi, it is typically 12 months or more. This means your private lender would have to wait at least that long before getting taken out.
Transactional funding refers to very short term bridge financing, typically just a few days, but there are some 30-90 day TF's out there. That stated, I don't know any of them that would want to fund based on the hope of you getting a bank refi to take them out.
To specifically answer your last question, no bank is going to give you a pre-approval letter for a refi on a property you do not own yet and even if you did, not before the seasoning period was up.