Investor · Kearney, NE · Member since 2021 · 10 posts · 4 votes
Hi BP family,
I will be purchasing a property for cash in full in Omaha. Looking for delay financing provider/bank that would allow me to cash out at a competitive rate.
Delay financing does not need any waiting period is that right? What is the typical closing period?
If part of your cash buy is from hard money that does not hold any lien, collaterals etc would that qualify for delay financing?
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
5y
@Wei Jie Chin certainly here to help in any way if I can. "Delayed Financing" is a Fannie/Freddie term so you want to make sure you can qualify for that type of a loan. Delayed Financing also applies to "cash only" purchases. So if you use hard money to help you purchase it then delayed financing won't apply. There are LOTS of things to know about when exploring this option so please work with someone who has real experience - not just someone who says "We can do that". As an investor I need to know all the roadblocks that I will face so I can make an informed decision about the property. Feel free to ask anything else if needed. Thanks!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
5y
@Wei Jie Chin certainly here to help in any way if I can. "Delayed Financing" is a Fannie/Freddie term so you want to make sure you can qualify for that type of a loan. Delayed Financing also applies to "cash only" purchases. So if you use hard money to help you purchase it then delayed financing won't apply. There are LOTS of things to know about when exploring this option so please work with someone who has real experience - not just someone who says "We can do that". As an investor I need to know all the roadblocks that I will face so I can make an informed decision about the property. Feel free to ask anything else if needed. Thanks!
Investor · Kearney, NE · Member since 2021 · 10 posts · 4 votes
5y
Hi Andrew,
Thank you so much for your response. Delay financing doesn’t seems like a very familiar term when I ask around. It’s pretty much cash out refi without the waiting period for cash buyers is that right? Have you done this before? Is the rate typically the same as conventional loan for investment property? What should I be asking when speaking to lenders? What other avenue could be done to cash out in a cash buy scenario in your experience.
I haven't done one, but my lender has. To my understanding, its just a "regular conforming loan," except you close on the loan after you close on the property, within 6 months. Your LTV is based on the purchased price of the property. I don't know what Fannie/Freddie were thinking, but it is perfect for what you are doing. Offer and buy in cash to have a stronger offer and close without worrying about the loan, then get the loan shortly thereafter 'on your own time'
Direct message if you'd like to chat or want a referral.
Rental Property Investor · Palo Alto, CA · Member since 2021 · 27 posts · 22 votes
5y
@Wei Jie Chin
I agree with doing a lot of research on this. I was told “sure we do it all the time,” and ultimately it didn’t work out for me. I was told that people get money from family, then do a delayed refi, and pay people back.
Yes, it’s a great option if all the money is YOURS. If you’re going to use a hard lender, I don’t know how that will work. If they are on the deed as well, it might work. Gift money was not permitted.
But it’s not the end of the world. I’m waiting a few more months to make it to 6 months to cash out refi. Terms are not as favorable though as delayed refi. Good luck!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
5y
@Wei Jie Chin yeah, lots of lenders are not familiar with many things we do as real estate investors...it's part of the game with what we do. So we lean on other real estate investors to help us find good lenders. I wrote an article on how to do that which you can find HERE.
If you want to read more on buying with cash and other challenges you might face you can read the Bigger Pockets post I wrote on it HERE.