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Updated almost 11 years ago on . Most recent reply

New to REI - Question on financing
Hello,
If I make a cash offer at a ~15%-20% of the asking price and buy the home. Can I then get a loan to get my investment out?
For example: A property on short sale for $100k (market value $135k) and I offer $$80k cash. Once I have the title, can I then get a loan based on the home appraised value (equity) for $100k?
Thank you for your help!
Most Popular Reply
The short answer is: if the property is financable and you qualify for the amount of financing you want to get, yes you can do it like you mentioned. Without knowing the details about your situation, in general you can do a new purchase mortgage within six months of purchase at lower rates. You can also do a cash out refi which will give you 75-80% of the appraised value as long as the market supports it. Be sure you are really sure about the market value of the property, aka do NOT depend solely on zillow or trulia. Their estimates tend to be high. The amount you can finance is based on the bank appraisal's value, which is very conservative. In other words, make sure 135k is supported by recent market activity.
Also make sure you can get a loan. I would talk to a good Fannie/Freddie direct lender or two to make sure you qualify.