Asking the bank for a mortgage on a property I own

Overland Park, KS · Member since 2015 · 70 posts · 20 votes

Newbie question: suppose I buy a house cash, fix it up and then decide I want to rent it out. Can I ask the bank for a mortgage on the property so that I can take money out of it in the form of refinancing to use it to buy another property? That'd be like buying the property from myself and putting a mortgage on it.

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Joshua D.
Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes
10y
@Miguel G.
The short awnser is yes. You can morgatage a house that you have bought with cash and then rehabbed into a nicer place.
If you would like more info on how folks do this regularly, look up the BRRRR strategy here on BP. It is describing the question you asked.
Best of luck out there.
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Stone Teran
Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
10y
Yes, most banks do this "cash out" financing.
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Dante Pirouz
Investor · Almont, MI · Member since 2015 · 361 posts · 302 votes
10y
Yes you would need to wait 6 months-1 year (depends on the bank) after your purchase date for what's called seasoning and then they will use the appraised value (rather than your purchase amount) to calculate the LTV that you can take out. If you want it faster than 6 months usually they will base the LTV on the purchase price you paid.
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