Refinancing Rental Property Purchased with Cash from HELOC

[Arthur Cross-Najafi]

Hello,

I recently purchased a duplex using cash from a home equity line of credit (HELOC). I have been reading about the refinancing process and it appears that normally you need at least 6 months of rental history when you go to refinance a rental property. I am currently renovating the property using my own cash as well as some contributions from the HELOC. My question is whether refinancing is different if you own the home outright (purchased 100% with cash), and whether the fact that that cash is leveraged from the outright ownership of a primary residence affects the process. Basically I want to set it up so that the rental property has the mortgage and the HELOC is paid down using the cash from said mortgage in order to free up HELOC cash to potentially purchase more property (or simply transfer the lien off the primary residence and onto the rental property). If anyone has any insight about this particular scenario and what I should anticipate with the process that would be greatly appreciated. Thank you!

[Bob Okenwa]

@Arthur Cross-Najafi

To get your money back immediately, you'd do delayed financing. In this scenario, the lender would give you a loan equal to the lower of what you paid + closing costs or 70% of LTV.

As @Jody Sperling stated, most lenders won't give you a cash-out refinance using the ARV until you've owned the property for at least 6 months.