Refinance at appraised value at closing ~$100k
I have a cash deal under contract that I'm looking to refinance at appraised value rather than acquisition price right at closing. It will probably appraise for around $100k. It will be titled in an LLC. Can someone recommend a lender to work with?
Quote from @Emily R.:
I have a cash deal under contract that I'm looking to refinance at appraised value rather than acquisition price right at closing. It will probably appraise for around $100k. It will be titled in an LLC. Can someone recommend a lender to work with?
Hi Emily,
I'm not aware of any lenders that would be willing to refinance a property based on the appraised value immediately after a cash closing paying under market value. It's way too risky from the lender's perspective. You'll more than likely have to wait the 3 month title seasoning period before being able to refinance and tap into some of that equity. Think about it this way, if you pay $25K cash for that property, is it reasonable that a lender would turn around and give you $75K (assuming 75% LTV and it appraised at $100K) the next day? If you're trying to tap into the equity before the 3 months of being on Title, your leverage will be based off the acquisition price plus any verifiable rehab.
Emily - Yes, I generally agree with Brandon. I haven't found a lender willing to loan off of the appraised value instead of acquisition price at closing. After 3-4 months you might find a lender willing to loan against the home if some work/value add took place increasing the overall value of the home. In the Philadelphia area I would suggest talking to American Heritage Credit Union, WSFS, and Sun Federal Credit Union. I've spoken to them before and I think they would be a good starting point for you. Good Luck!
@Emily R. My team offers lending for short term projects and I have some solid referrals in this market. I'll be reaching out over DM!
Quote from @Emily R.:
I have a cash deal under contract that I'm looking to refinance at appraised value rather than acquisition price right at closing. It will probably appraise for around $100k. It will be titled in an LLC. Can someone recommend a lender to work with?
Hey Emily, try reaching out to @Gaetano Ciambriello. He might be able to help
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Emily - as others have mentioned, you will likely need at least 3 months seasoning for a lender to look at appraised value compared to cost basis.
Quote from @Emily R.:
I have a cash deal under contract that I'm looking to refinance at appraised value rather than acquisition price right at closing. It will probably appraise for around $100k. It will be titled in an LLC. Can someone recommend a lender to work with?
Hey Emily,
Most lenders require 3-6 months seasoning, 12 months on conventional loans to use the appraised value.
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Quote from @Emily R.:
I have a cash deal under contract that I'm looking to refinance at appraised value rather than acquisition price right at closing. It will probably appraise for around $100k. It will be titled in an LLC. Can someone recommend a lender to work with?
@Emily R.
We have a non seaoning product meaning you can pull out cash immediatly using the current value. The way we do it is give you a short term bridge loan with no pre-payment penalty at 75% loan to value using the "imporved" value giving you the cash back. Then turn around to refi into a 30 year fixed conventional loan/DSCR loan right away using the same appraisal. So, you have your cash back out with no seasoning requirement AND the long term fixed rate.
The reason this works is because the seasoning requirements for conventional loans and MOST non-conventional products are ONLY for cash out loans where you walk away with cash NOT for when you simply pay off what is owned on the mortgage you are refiancing. Our bridge loan is our money so we make the rules, and we do not have seasoning for value. Then we refi with no cash out so no seasoning issues there either.
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