Investor · Austin, TX · Member since 2017 · 352 posts · 374 votes
Hello All,
I found a motivated seller who is open to financing the deal. For argument's sake, let's say we agree to 10% down, 6% interest, 30 year amortization, 7 year balloon.
Purchase price will be 100k, rehab will cost 30k, ARV is 200k.
Question: Will I be able to refinance or get a HELOC on the property to pay the balloon in 6-7 years?
Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
7y
How confident are you in the $200k ARV? You should be able to pull the cash out as soon as 6 months (and I probably would). By doing a refi 6 months+ you should be able to pull $140k out of the property. You get back your original 10%, $30k, and get a little bit of walking around money as well.
Investor · Austin, TX · Member since 2017 · 352 posts · 374 votes
7y
I am 99% certain ARV will be between 190-210k @Nick Giulioni... thanks for your quick reply! So even though the seller is holding paper, I'll still be able to go to a traditional lender and refi? Are there steps I can take to make this process go smoothly?
Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
7y
I haven't had any issues with transitioning from seller financing to traditional financing. As with any transaction, have all your documentation ready to go, optimal DTI, and find an investor friendly lender. If you don't know one in your area, I'd reach out to your agent. They should be relatively well connected.
Lastly, I'd give yourself 2-3 months before refi time to start the process. It always takes longer than you think it should!