Refi's - how long to wait?

Question

I'm contemplating a buy, rehab and hold strategy for multifamilies (2-4), using private or hard money for purchase, cash for reno, then refi-ing and repeating the process. But I'm read several different rules about when you refi a rehab property - only with tenants, after six months, after 12 months. It's critical that I know how long I have to maintain the original financing before I can refi. So what's the actual rule?

Thanks!

Curt Davis · Answer

I suggest you speak with your lender who will do your refi to see what their guidelines say.  Some lenders are different.  I have a lender who will do a refi starting the very next day.

I think they even lend in Texas

Joe Villeneuve · Answer

The actual rule is based on the lender.  Find your lender, and ask them.  All lenders are not the same, so if one tells you what you don't want to hear...keep looking.

Michael Wentzel · Answer

@KJ D'Costa As Curt said, you need to sit down with your lender. I would actually sit down with 3 or 4 to find one that is willing to work with you. Maybe talk to someone at one of the big banks and then 3 local banks or credit unions. If you want to refinance into an conventional 30-year fixed, I've heard you'll have to wait at least six months to a year. But if you consider refinancing into portfolio loan (held by the bank), they will sometimes do it as soon as you complete rehab.

So right now, I take cash from a private lender to purchase and rehab a property. As soon as it is done, by lender (a regional bank) will send an appraiser out and write me a loan at 80% loan-to-value, amortized over 20 years, 5% interest and a balloon payment after five years. Not as good as a 30-year fixed, but quicker, easier (less underwriting) and cheaper.

My strategy for this coming year is to refinance some of my portfolio loans into conventional while still acquiring additional properties with my private lender and portfolio loans.

I like your strategy. Sit down with a few lenders and see what they can do for you.

Mike

Refi's - how long to wait?

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