Is 80% LTV Cash Out possible on a new BRRRR rental?

Question

My wife and I just completed a full renovation of a four bedroom three bath single family home in Baltimore.

We were planning on selling it but are leaning towards keeping it and using the BRRRR method. We have excellent credit. We're looking to get out as much cash as possible, is 80% possible? There isn't a lease on the property yet but I'm sure there would be quickly because everything is new including all new plumbing, electrical and HVAC.

Nicholas L. · Answer

@Josh H.

i think it's possible, but you might have to call a whole bunch of lenders, and try both banks and DSCR lenders. you might also have to wait until 1. 6 months from purchase and 2. until it's leased. for example, someone might offer you 70% cash out now if it's vacant, but 75-80% if it's leased out and you're 6+ months from purchase date.

so make a whole bunch of calls and see what you get offered. I recommend The One Brokerage, David Greene's company. I'm not affiliated with them or sponsored by them in any way, they're just easy to work with and will shop your deal around to try to get you multiple loan offers.

Brandon Croucier · Answer

The product is available but the pricing is not as pretty by any means, you’ll be looking at a rate 1-1.5% higher and possibly an extra .5-1 point in cost right off the bat.

Happy to connect!

Erik Estrada · Answer

Yes like others have stated,

You can do an 80% Cash out on a DSCR loan, however the rate will be significantly high due to LLPAs, making it very difficult to qualify. You can also look into a cash out bridge loan at 80% LTV if the goal is to refinance into a conventional mortgage. There is no Prepayment Penalty on this loan.

Emanuele Mayer · Answer

Yes but rate aren't great.

Bud Gaffney · Answer

No. 75% is max.

Kris Holt · Answer

Josh,

The answer is yes, but it's takes a few more pieces of info to say truly what's possible. I'd be happy to jump on a call. We wouldn't have to dive too deep and could issue you a preliminary term sheet pretty quickly, so you know what you're possibly looking at. Let me know. Happy to help!

Alex Bekeza · Answer

@Josh H. We offer 80% cash out in a few states (unfortunately not MD) but as others have mentioned the LLPA associated is substantial. 75% is the industry standard for max cash out but we could close with it vacant as long as it's rent ready and listed for rent online. We'd use the appraisers opinion of market rent to calculate DSCR and just want to see at least a 1.0 (Rent divided by PITI).

Henry Lazerow · Answer

For the lenders in here just curious is the rate on a DSCR higher if vacant use market rent? Or do you mean rate is higher due to 80 ltv vs 70 ltv? Thank you

What are you typically seeing on 70 ltv 0 points 3/2/1 now?

Jon K. · Answer

Contact @Brian Valdivia at www.beltwaylending.com. He's local to Baltimore and will be able to give you the best options you can currenly get.

Connor Hibbs · Answer

Hi Josh,

80% is available, but the rate will be significantly higher than it would be at a more standard 75%. You'll also want to make sure that you get a lease for the property. Most lenders are fine with just seeing a signed lease and receipt of the first month's rent with security deposit, so the tenant doesn't need to actually be moved in yet. or 80% though it will certainly make the process smoother if you have a tenant lined up.

Is 80% LTV Cash Out possible on a new BRRRR rental?

Is 80% LTV Cash Out possible on a new BRRRR rental?

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