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Mike Whelan
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Lender for Cash-out Refi Recommendation - FL

Mike Whelan
Posted Jul 25 2022, 07:14

Hi, I'm within a few weeks of completing a renovation on a multi-family property I purchased with cash. Does anyone have any recommendations for lenders that have competitive rates for a cash-out refi and does not require a seasoning period? We'll be all-in at $380k in cash and the property should appraise between $520-$550k. Just like most of you, I'm sure, my goal is to roll the cash into more properties and continue doing this so I'd love to have someone reliable to go back to over and over again versus having to shop rates all over again.

Thanks!

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Matt Cartwright
  • Lender
  • Newport Beach, CA
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Matt Cartwright
  • Lender
  • Newport Beach, CA
Replied Jul 25 2022, 07:26

@Mike Whelan Hi Mike, I may be able to assist you with the C/O on this and would love to give you some guidance. No seasoning, no tenants needed either so you could realistically start the process before the rehab is even completed and still qualify.

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Andrew Garcia
  • Lender
  • Charlotte, NC
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Andrew Garcia
  • Lender
  • Charlotte, NC
Replied Jul 25 2022, 07:28

Hi @Mike Whelan, this might be considered "delayed financing" so you would not be required to wait 6 months in order to do a conventional refinance.

Alternatively, you can do a DSCR refinance at a slightly higher rate.

If you would like a referral for either option, feel free to shoot me a message.

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Mike Whelan
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Mike Whelan
Replied Jul 25 2022, 07:29

Thanks, guys.  Would really prefer to put a conventional 30 year mortgage on this.  Will shoot you both a message.

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Jack Mawer
  • Lender
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Jack Mawer
  • Lender
Replied Jul 25 2022, 07:36

Mike, a DSCR loan would be in your best interest. When did you purchase the property? Most lenders do require a seasoning period, but it is usually under 12 months.

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Timothy Hero
Pro Member
  • Lender
  • United States
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Timothy Hero
Pro Member
  • Lender
  • United States
Replied Jul 25 2022, 09:05

My private lenders only require 3 month seasoning, but we can get the process started at 2 months.

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Andrew Postell
Lender
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#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
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Andrew Postell
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#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
Replied Jul 26 2022, 07:08

@Mike Whelan thanks for posting.  Certainly hope that Tallahassee market is doing well.  I owned my first property there - I attended TCC and FSU and househacked while I was there.  

Now, to be formal about your request here - to write a conventional loan (Fannie Mae or Freddie Mac) on a multi-family investment property your cash out limit is 70% of the ARV. So if the property appraises for $550,000 then you can get a $385,000 loan RIGHT AWAY - with NO waiting.  Now, I might be off by a few dollars here but the formal rule for Fannie/Freddie is that you CAN get a cash out loan as long as you purchased the property with cash.  The amount of cash you can receive will be limited to the lesser of:

1. The purchase price + closing costs of when you purchased the property

2. 70% of the ARV

So if you purchased for $380,000 I think it's safe to assume you had closing costs which would put you right at the maximum amount you can receive anyway - NO WAITING.  If a lender is telling you to wait - go to another lender. No commercial loan needed. No private loan needed. No DSCR loan needed. A traditional, conventional, conforming Fannie/Freddie loan. There are plenty that can provide this loan right now.

I hope that all of this makes sense but let me know if you have any questions on it.  Thanks!

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J. Mitchell Bernier
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  • Lender
  • Camilla, GA
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J. Mitchell Bernier
Pro Member
  • Lender
  • Camilla, GA
Replied Jul 26 2022, 09:40

Hey Mike, that sounds like a pretty good deal based off the numbers! We do quite a bit of lending down there but all our loans are done as commercial loans, which means no long term fixed rates. However, this also means we don't have seasoning periods and right now we could do 75-80% LTV on the appraised value even for a cash out. So it will really just depend on what you are looking for, the lowest long term rate or the most cash back?

Good Luck!