BRRRR.....refinance time advice
Hey Everyone, thanks in advance for any advice that you can give me.
Just looking for thoughts from others to get me thinking about strategies going forward.
I will lay out my current scenario as briefly and succinctly as possible, let me know if you would like any more details I left out!
-Purchased Triplex (all 2/1's) in 08/31/2015 for $235k
-Purchased as owner occupied with 3.5% FHA 5/1 ARM 30 year loan (knew I would refinance soon to get rid of PMI)
-Complete rehab of Unit #1 (brought rent from $800 to $975 month)
-Complete rehab of Unit #2 (was being rented prior to purchase for $800, I am currently living in this unit and could rent for $950)
-Unit #3 has problems tenants who were inherited with property, no work has been done on unit and it is in rough shape (being rented for $800 but could increase to $850)
-I have hit the 1 year mark required for owner-occupied loans (thats my understanding at least), and want to move on to my next property as soon as possible
-I have some scenarios I am considering and wanted your thoughts:
Scenario #1) I could refinance now, with unit #3 not done. I would need it to get reappraised for roughly $275k I believe to drop my PMI without having to add more cash, and I am fairly confident with the rehab and appreciation in the area (Crystal Beach, FL) that this would be obtainable. Then I could hopefully refinance it as an investment property (30 year fixed) and allow myself to purchase my next property as an owner occupied with another low down-payment. However, if I do this scenario and then want to rehab Unit #3 shortly after, although I would be able to increase it's rent and improve my cash flow, I wouldn't be able to get access to the equity via a cash out refinance (unless I did a 2nd refinance) in order to fund future purchases, which is what I would like to ultimately begin doing after rehabbing if the appraisals come back high enough.
Scenario#2) I could remove tenants from Unit #3 ASAP; rehab the unit and then rent out; then get appraised in hopes to raise the value enough to pull out some cash for a down-payment on my next owner occupied property, and money to go toward rehab of the new property (and still drop my PMI of course). This scenario might take a little longer in order to remove tenants and rehab unit.
Also, just a general question if I do refinance my place right now and get a 30 year fixed mortgage, would I have to live in the house for whole other year to get an owner occupied rate? And if I wanted to move on to purchase a new property as an owner occupied shortly after my refinance of this property would I therefore have to do this refinance as an investment property although I would still be living in it for a few months? Is it perhaps worth it in the long run to stick it out for another year at this property to lock in a lower interest rate for the 30 year fixed mortgage?
Last thought. I feel like this might be a little backwards to what I have read about the BRRRR strategy, but would it make any sense if I did stick around and rehab my place and then refinance it and stay for another year in order to lock in a lower rate for a 30 year fixed rate as an owner occupied, and then while still living in my first property simply get my next property as an investment property with 20% down (hopefully with some help from pulling some equity out from the refinance on the first property), then fix up the units in the new building while living in my old, and then move into the new property once it has been a year from the refinance on my first property, then refinance the 2nd property upon moving in as an owner occupied to lock in a lower interest rate and live there for a year while I repeat this cycle, basically in order to lock in lower interest rates as I go.
Sorry so long, any thought would be greatly appreciated!!