8 Replies

Is it possible to use purchase a property with hard money or OPM or LOC and then refinance it through the bank?


@Nancy Brook

Thanks.  I am trying to get started and want to make sure I check out all my options.


That has been our model for all our purchases to date.  Hard money purchase to address the poor condition of the property until rehabbed.  Then refi out into cheap 30-year FNMA money.


What you are referring to is the Buy rehab and refinance strategy. There are a lot of good articles on this if you look around on bigger pockets

It should be, Some of those sources for money may want a 1st position mortgage against the property, which would be paid off by a refi. The kicker is that most banks want a property to be owned (seasoned) for a period of time before they will let you refinance, between 90 days to 2 years. This would be a question you would want to get with your lender about before using a LOC or some other funding source to purchase.

Make sure that you can carry the higher cost for the LOC/Hard money when you analyze a property. You don't want to be in a position where you are losing money each month from the start then have some issues with the refi.

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@Jesse Waters - definitely a good point:  before you take any hard money or otherwise, get connected with your refi lender and make sure you are pre-approved for the back end and what the requirements are.  

We do not work directly with any bank, rather use a broker that works primarily with investors and has connections to a pool of lenders that are investor-friendly and do not have any seasoning requirements.

We are typically in hard money any where from 45 to 60 days these days, depending on rehab and whether or not our DTI requires a tenant in place (e.g. to include the rental income on the refi app).

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