refinancing w/o "seasoning" period

[Adam Drummond]

Hey Everyone-

Any recommendation on doing a cash out refinance on a rental home where you do not need to own it for six months?  I bought a house that I am going to use as a rental.  I was hoping to pull some cash out of the house (loan would be under $50k), and did not want to wait 6 months to refinance.  Any suggestions or ideas?  Thanks in advance!

Adam

[Account Closed]

@Adam Drummond

I agree with @Robert A.

Here is an excerpt from another BP member regarding delayed financing that I hope will help you:

If you buy a property with cash (or with a HELOC) you can receive a cash out loan on Day 1.

There is not a 6 month waiting period with receiving a cash out loan if you purchased a home with cash or with a HELOC

BUT you will be limited to the amount of….

Your purchase price + closing costs (costs when you purchased the home)

OR

75% of the “After Repair Value”…

WHICHEVER IS THE LOWER AMOUNT (super important)

These rules are important to understand so here are two examples:

Example 1: If you purchased a home with $50k of cash, and put $30k of renovations into the loan, and the home was worth $100k. 75% is $75k and $50k is your purchase price. So you could only receive $50k in your first 6 months ofownership since the LOWER amount is your purchase price. After 6 months you could receive the full 75% of the ARV.

Example 2: If you purchased a home with $80k of cash, put $5k into the home, and the home was worth $100k. 75% would be $75k and your purchase price is $80k…so the lower amount is $75k.

When buying a home with cash you can absolutely get cash back right away but you will be limited to the lower of those two amounts.