Paid cash for a house, looking to mortgage now

Member since 2021 · 2 posts · 2 votes

I bought a house with cash from pulling a heloc on my home, off market, unappraised (deal was a no brainer in a great part of town.)

My original plan was to update and flip it , pay off the heloc and use the profits toward buying my first rental. However, the area it is in is high demand and rents are accordingly high. So now I’m considering keeping it and renting it.

My question is, does the 6 month wait time on mortgaging it still apply since an appraisal wasn’t done when I purchased it? With that being the case, can’t I go ahead and get it appraised now and mortgage it if I want? Or am I missing something?

Thanks in advance!

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Ko KashiwagiPro Member

Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes

Hi Ryan,

You can do a delayed financing to get a mortgage based on your purchase price. There are also programs you can use with minimal seasoning (0-3 months) to get it based on the new value if you've done rehabs.

310-848-9776

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Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 679 votes
2y
Quote from @Ryan Johnson:

I bought a house with cash from pulling a heloc on my home, off market, unappraised (deal was a no brainer in a great part of town.)
My original plan was to update and flip it , pay off the heloc and use the profits toward buying my first rental. However, the area it is in is high demand and rents are accordingly high. So now I’m considering keeping it and renting it.
My question is, does the 6 month wait time on mortgaging it still apply since an appraisal wasn’t done when I purchased it? With that being the case, can’t I go ahead and get it appraised now and mortgage it if I want? Or am I missing something?

Thanks in advance!

Still have to wait at least 90 days seasoning in order to obtain cash out.
[email protected]860-538-3672
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Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y
Hi Ryan,
You can do a delayed financing to get a mortgage based on your purchase price. There are also programs you can use with minimal seasoning (0-3 months) to get it based on the new value if you've done rehabs.
310-848-9776
1 Reply
Zach BossonBusiness Member
Lender · Member since 2023 · 42 posts · 15 votes
2y
@Ko Kashiwagi is correct.
Delayed financing is what you're looking for.
It allows you to borrow up to the amount of cash you used to buy the property, no more. This will be done as a "rate/term" transaction, so better rates than a cashout transaction. Be prepared to document where that cash came from - in your case, that's easy, your HELOC.
Would be happy to help you with that sort of transaction if you want to reach out - I find a lot loan officers are unfamiliar that this option even exists.
[email protected]888-885-7789
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Preston DeanBusiness Member
Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
2y
Hi @Ryan Johnson

It sounds like you are trying to do a similar strategy to the BRRRR process. I know @Andrew Postell can help answer some questions you might have when it comes to the process. From my understanding you don't need any delay with appraisal

[email protected]817-480-9452
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Ivorie WalkerPro Member
Member since 2023 · 13 posts · 9 votes
2y
Quote from @Zach Bosson:

@Ko Kashiwagi is correct.
Delayed financing is what you're looking for.
It allows you to borrow up to the amount of cash you used to buy the property, no more. This will be done as a "rate/term" transaction, so better rates than a cashout transaction. Be prepared to document where that cash came from - in your case, that's easy, your HELOC.
Would be happy to help you with that sort of transaction if you want to reach out - I find a lot loan officers are unfamiliar that this option even exists.

@Zach Bosson does this option also apply if the property was purchased using funds from a private lender?
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Zach BossonBusiness Member
Lender · Member since 2023 · 42 posts · 15 votes
2y
Quote from @Ivorie Walker:

Quote from @Zach Bosson:

@Ko Kashiwagi is correct.
Delayed financing is what you're looking for.
It allows you to borrow up to the amount of cash you used to buy the property, no more. This will be done as a "rate/term" transaction, so better rates than a cashout transaction. Be prepared to document where that cash came from - in your case, that's easy, your HELOC.
Would be happy to help you with that sort of transaction if you want to reach out - I find a lot loan officers are unfamiliar that this option even exists.

@Zach Bosson does this option also apply if the property was purchased using funds from a private lender?

Ivorie, in that case you could just do a traditional refinance of the borrowed funds form the private lender. There is traditionally no waiting period for a rate/term refinance. You would not be able to access additional cash beyond what was borrowed.
The other scenario worked similarly, you can't borrow beyond the cash you paid.
[email protected]888-885-7789
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Joseph Chiofalo
Banker · Henderson, NV · Member since 2023 · 317 posts · 74 votes
2y
Hi Ryan,
When did you purchase the property?
How much were you looking to borrow?
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