Putting a mortgage on my primary residence that I bought cash

6 Replies

I am purchasing my grandmother's house from my family as my primary residence. They are giving me a great "family" discount. My plan is for my wife and I to purchase it in cash, renovate it, and then put a mortgage on it to pull out the equity to invest. I spoke with my usual lender (RP Funding) and they told me that I couldn't refinance (put a mortgage on it) until I've owned it for 6 months. This didnt sound right since I've heard so much about the BRRRR strategy on bigger pockets. I was under the assumption that I could refi immediately when done renovating since I purchased the house in cash. Any information would be much appreciated. Thank you very much!!

Well more information in regards to my previous post.  I spoke with an actual loan originator from the company instead of just the representative answering the phone, and they did say it was okay for me to immediately put a mortgage no the home after my renovations (no lag time). So that'll be my plan.  Perform the renovations and pull the equity out to invest in income properties.

This is called the Fannie Mae Delayed Finance Exception. It should be an arms length transaction, meaning you paid market price and have no relation to each other. If you hadn’t paid cash, six month seasoning is typical.

@Kerry Baird ....my plan was to buy the house cash to get it in my name. Then perform the renovations. Then put a Loan on it and pull out as much equity as I could for other investing. In this scenario, do you know if I have to wait 6 months from when I purchased it? Or do you know of lenders that would let me refinance as soon as I’m done with the renovation?
Thanks for your help.

@Thomas S.

I'm paying cash because I dont want to pay twice for mortgage fees and also have to have the wait time before I can refinance like a lot of mortgage companies charge.  My dad will give me a formal private loan for the cash so makes no sense for me not to do so.