Rental Property Investor · Washougal, WA · Member since 2015 · 82 posts · 18 votes
so, im getting conflicting answers from people. my question is this: if i use hard cash or private money to buy, rehab, and hold. as long as i keep my ARV under their loan threshold of 70-80%, i should recoup all the money i put into property...correct? yes....this is how green i am. i guess it would be more like...buy, rehab, recoup money, and hold
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
11y
The 'formula' you suggest is theoretically possible.
Example: Buy a property for $100K with $70K private money and your $30K part. Fix it up for ?? $12K?? Rent it. If the property appraises for say $160K, and you can do a refi cash-out using a 'traditional' lender at 70%, and you meet their underwriting requirements, and this is property number 4 or less for you, then you may be eligible to use B2-1.2-03, Cash-Out Refinance Transactions. Acceptable uses of the cash-out include: "taking equity out of the subject property that may be used for any purpose"
Real Estate Consultant · Wittenberg, WI · Member since 2014 · 572 posts · 572 votes
11y
Your biggest challenge may be timeframe. If the private/hard money loan is due in 6-12 months, you need to be able to buy, fix, rent, and refinance within that timeframe. Use caution.
Investor · Isabel, KS · Member since 2015 · 247 posts · 85 votes
11y
Yep you got it!
Buy and rehab and don't cross the 80% of value number. That will be your down payment with the bank.
If you get it all done and you're at 60% then you will get a check at closing of refi for the portion of dollars between 60% and 80% that will go into your pocket as wages or what have you.
Rental Property Investor · Washougal, WA · Member since 2015 · 82 posts · 18 votes
11y
I hope it's that easy. Some are saying the bank wants you to hold property for a time period especially if it's a rental. I just want my money back out so I can get the next deal...quickly