I just signed initial disclosures and submitted all documentation for a cash-out refi on a single family property I bought one year ago. I'm expecting the property to appraise for 70k and take out 75% LTV for a total of 52k in cash out. My plan is to use this money as a down payment for a small multifamily. I'm going to look at a 3 unit property this afternoon asking price is 90k. My numbers say it would be a good deal at the asking price + 20k in renovations/closing/vacancies.
If I like what I see today I'd like to make an offer. Am I being too aggressive considering I don't have any guarantee that the cash out refinance will go smoothly? Even if the single family only appraises for 50k it would give me enough cash for 25% down on the 3 unit, but there is always a chance the cash out refinance could fall through all together. I only have 10k in personal savings I could use for this deal, not enough for the down payment. I don't want to let a good opportunity slip through my hands but I also don't want to act irresponsibly.
Could you go thru fha to purchase multifamily property? That way you would not have to put down the 25%.
I am looking into refinancing my house to get it out of an fha loan. Then i can purchase a multifamily under an fha loan & house hack it, and not have to put down the 25%. I am very interested in others input about doing this & I really hope it works out well. Keep me posted on how this all goes.
Josh, I would consider having your lawyer add a clause to the contract creating a contingency for your cash-out refi. It would be a bit unusual, but in theory not much different than a contingency that your house must be sold first.
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