Newbiw Financing Question

[Mitchell Finn]

First off I want to thank everyone that contributes to these forums. You are all a huge help.

I have listened and researched for quite some time and kind of house hacked for my first rental through VA loan. Now as I get ready to actually start purchasing rentals to BRRR, I have a money question that I can't find an answer to. If I get seller or hard money financing to buy and rehab, when I try to refi do I need cash at closing for down payment with a bank? Or is it covered in the additional value added? Thank you.

[Forrest Faulconer]

Originally posted by @Mitchell Finn:

First off I want to thank everyone that contributes to these forums. You are all a huge help.

I have listened and researched for quite some time and kind of house hacked for my first rental through VA loan. Now as I get ready to actually start purchasing rentals to BRRR, I have a money question that I can't find an answer to. If I get seller or hard money financing to buy and rehab, when I try to refi do I need cash at closing for down payment with a bank? Or is it covered in the additional value added? Thank you.

Hi Mitchell! If you purchase a home using cash or other means you can typically refinance it at a certain LTV (loan-to-value) through a bank. However, in order to refinance it for a loan amount above the original purchase price, banks often have a seasoning period of 3-12 months. For a cash-out refinance it may be closer to 12 months. Call some banks and ask about their seasoning requirements and factor that into your BRRRR!

Forrest Faulconer