Hello everyone. I’ve been following the forum to build my knowledge as I prepare to purchase my first investment property. With that said here is my current opportunity.
Property is for sale. Friend is willing to loan me the cash for full purchase price (for a fair fee). Property would be purchased for cash in my name using his funds. (Avoids tying up 20% of purchase price for down payment required for traditional mortgage of my cash)
Once closed on. I would then plan to “refinance” the property and pay him off. As well as pull some extra for improvements to the property, depending on the equity (which I know is there otherwise I wouldn’t be looking at this property)
Am I missing anything? Would there be a reason a lender would not refinance within a few days/ weeks? Could this be as simple as I’m thinking?
I appreciate your input.
@Huey Martin You won't be able to cash out under conventional loan because this is not your funds which you use to purchase this property. You have to wait 6 month to cash out.
thanks for the reply. After discussing loan options with my credit union when I began my research I settled on a conventional loan. Seems the terms are better than a commercial at this stage (1st property) rather than putting it in my llc. To my knowledge I can still run expenses through the llc even though my person owns the property.
How would the bank know if it were my funds or not when it was purchased? I am going to the bank with a title asking for a mortgage, correct?
What are your goals for the cash out? Are you wanting to flip this or use it as a rental eventually? Some HML companies offer financing for a few years at better terms then a flip loan. They don't have the red tape and seasoning conventional loans require. You might want to check into something like that too.