Imvestor loan or owner occupy?

Question

I bought a 575k four plex here in Tempe Az. Its already in great shape but I am spending 50k to rehab further and realize potential value. Right now I have a hard money loan that funded 460 at closing and is holding 50k of rehab funds in escrow.

I put down around 120k of my own money, and want to cash out refi as soon and as much as possible. I also currently live near the property and could move into one of the units.

My question is can I refinance the hard money into a personal residence loan right after I am done with rehab? Then can I do a cashout refinance after 6 months at 75% ltv?

Would it be better to not move in and just try and cashout refi immediately as an investor loan and take a 70% ltv cashout?

Thank you for your help. Im flexible on my living situation but just not sure which route would be best.

Bridgette Delva · Answer

Hi @Erkan Gungor seems like you're exploring 2 possible scenarios for your refi options but in both cases, you'd need to check with the refi lender on their specific seasoning requirements.  Most require 6 -12 months and @Alex Bekeza may have an option that only requires 3 months of seasoning.

In the refi situation where you'd house hack, you would refi as your primary residence and may have more flexibility on the type of loan, interest rate and a higher LTV (80%).

In the refi situation where you would keep the 4 units rented and refi as an investor, the loan options may be fewer, the interest rate slightly higher and a a lower LTV (70-75%).

The option you choose will depend on your goals.  Will the property cash flow if you only rent 3 units? If currently you have a rent or mortgage expense, you could look at the possibility to save on your personal expenses by house hacking but that option may only make sense if the property cash flows.

I'd encourage you to talk to a couple lenders to help frame up the options for your specific investment.