Private Lending & Conventional Mortgage Advice

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Scott Winter
  • Costa Mesa, CA
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Lenders...what's the deal with the seasoning period?

Scott Winter
  • Costa Mesa, CA
Posted Jan 28 2022, 15:39

So, I'm staring at David Greene's BRRRR book right now pg 232...Seasoning Period 

"Many lenders don't want to finance something right after an investor buys it. This is because they want to make sure the property is stable, rented, and wasn't a "fire sale" situation.  This is one of the methods lenders use to protect their investment."  

Can someone explain the reasoning behind why seasoning periods exist or specifically how it protects the investment?

I'm in a situation where I'll be ready to refi in about 2 months of owning the property.  BRR_ ... 

I can only see my perspective, and my perspective says, "it sure would be nice to pull my money back out for the next project."  And it seems like lenders are dying for our business, but have a rule that I have to own the property for another month (some want 6 months!)?  It just seems arbitrary, so please help me to understand so I don't call every lender in the country.

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