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Chris Ross
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Delayed Financing/cash out refi lenders for Memphis SFR

Chris Ross
Posted Jan 23 2024, 15:23

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks

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Jay Hurst
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Jay Hurst
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Replied Jan 23 2024, 15:54
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


 For a conventional loan difference between closing within 6 months and after is the amount you can borrow. If you close within 6 months the most (assuming single family) is the LESSOR of 75% or what you paid for the property plus closing costs. 

if you have NO financing on the property AND you have waited to close after 6 months you can use the new value and borrow up to 75%. 

The rate and terms are no different on either option.  

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Chris Ross
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Chris Ross
Replied Jan 23 2024, 16:05
Quote from @Jay Hurst:
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


 For a conventional loan difference between closing within 6 months and after is the amount you can borrow. If you close within 6 months the most (assuming single family) is the LESSOR of 75% or what you paid for the property plus closing costs. 

if you have NO financing on the property AND you have waited to close after 6 months you can use the new value and borrow up to 75%. 

The rate and terms are no different on either option.  


Thanks for the clarification and reply Jay. This would be a single family residence with no financing so sounds like either option would work for me.  This is a turnkey property so it had a full rehab and that is priced into the purchase price already.   Based on that, the determining factors would be how much the appraisal would be right after close vs waiting 6 months and whether the interest rates would drop.  I’ll probably base the timing on interest rates.  I would assume lower interest rates would drive the appraisal higher but I realize that is not a given.  Thanks Again.  

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Devin Peterson
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Replied Jan 23 2024, 16:37
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks

If you made any renovations or upgrade to the property as long as you can document the changes, you should be able to find a lender who cannot least do this three months seasoning, if not sooner. Subject to 75%

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Jordan Ray
  • Real Estate Agent
  • Memphis, TN
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Jordan Ray
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  • Memphis, TN
Replied Jan 23 2024, 21:18
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


Have you looked into just doing a "rate & term" refinance until you can pull cash out after the 6 month seasoning?

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Derek Brickley
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Derek Brickley
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Replied Jan 24 2024, 06:32

Hey Chris,

For a DSCR delayed financing there is quite a bit of flexibillity since it is a non-conforming loan. I think it comes down to how quickly you want the cash back and what use you would have for it. In our case we wouldn't have any value seasoning on DSCR so as soon as you do the repairs, we can potentially use that higher value to get you cash out. It could then possibly be easier to follow that up with a rate/term refi if/when rates drop and get back into a conventional loan (if that would work for you or if that fits your situational goals). It definitely depends on what you might be looking to do though whether that makes sense.

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Chris Ross
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Chris Ross
Replied Jan 24 2024, 06:45
Quote from @Jordan Ray:
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


Have you looked into just doing a "rate & term" refinance until you can pull cash out after the 6 month seasoning?

 Thanks Jordan, that is a good idea.  I will look into a rate and term refinance.   I am paying cash for the the turnkey home and am trying to figure out the best time to pull out cash to buy a second property.  My thoughts are to wait until the next interest rate drop.   But I’ll look into rate and term. Thanks 

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Jordan Ray
  • Real Estate Agent
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Jordan Ray
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Replied Jan 24 2024, 07:07
Quote from @Chris Ross:
Quote from @Jordan Ray:
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


Have you looked into just doing a "rate & term" refinance until you can pull cash out after the 6 month seasoning?

 Thanks Jordan, that is a good idea.  I will look into a rate and term refinance.   I am paying cash for the the turnkey home and am trying to figure out the best time to pull out cash to buy a second property.  My thoughts are to wait until the next interest rate drop.   But I’ll look into rate and term. Thanks 


Your welcome.

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Erik Estrada
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Erik Estrada
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Replied Jan 24 2024, 10:33
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks


 Hi Chris, 

If you are putting over $10k in renovations, you can get around the seasoning requirement entirely with a DSCR loan. You may use the new appraised value, however the lender will determine what the final opinion of value is.

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AJ Singh
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AJ Singh
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Replied Jan 24 2024, 19:42

@Chris Ross

Please do an inspection of the turnkey property via an independent inspector as soon as you open escrow. That should be part of your due diligence. Please pay special attention to plumbing and electrical.

Enough threads on BP on pros and cons of turnkey buying.

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Chris Ross
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Chris Ross
Replied Jan 24 2024, 20:08
Quote from @AJ Singh:

@Chris Ross

Please do an inspection of the turnkey property via an independent inspector as soon as you open escrow. That should be part of your due diligence. Please pay special attention to plumbing and electrical.

Enough threads on BP on pros and cons of turnkey buying.

Thanks AJ, appreciate the advice.  I did get an inspection and there is a plumbing issue that the city needs to take care of.  Glad I did the inspection before closing. A good inspection is great advice.  I guess turnkey isn’t always fully turnkey as advertised.   Although to me plumbing and electrical are the most critical components of turnkey so it’s a bit concerning this came up on inspection for a turnkey property. The company seems to be all over it so hopefully this gets repaired but we will see. Thanks for the advice. 

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Stephen Akindona
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Stephen Akindona
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Replied Jan 30 2024, 17:42

Hey @Chris Ross I am curious as to why you would buy a turnkey property with cash to refinance it later? Did you buy a turnkey property under market value? It is likely that at the very least you paid market value, you may have actually paid a premium. If you do a refinance it doesn't matter if you do a rate and term or cash out, you will only get a 75% LTV. If you purchased with no equity then you are actually going to end up putting down more money than if you would have just purchased with conventional financing up front. Most investors are trying to stretch capital to buy more properties. Unless I am missing something you would have been in a better position just buying with 20% down on a conventional loan. Hit me up to chat more about it if that doesn't make sense! Happy investing

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Chris Ross
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Chris Ross
Replied Jan 30 2024, 18:00
Quote from @Stephen Akindona:

Hey @Chris Ross I am curious as to why you would buy a turnkey property with cash to refinance it later? Did you buy a turnkey property under market value? It is likely that at the very least you paid market value, you may have actually paid a premium. If you do a refinance it doesn't matter if you do a rate and term or cash out, you will only get a 75% LTV. If you purchased with no equity then you are actually going to end up putting down more money than if you would have just purchased with conventional financing up front. Most investors are trying to stretch capital to buy more properties. Unless I am missing something you would have been in a better position just buying with 20% down on a conventional loan. Hit me up to chat more about it if that doesn't make sense! Happy investing


 Hey Stephen, appreciate the note.  I do agree with you about using leverage and other people’s money to acquire properties, especially turnkey since it is priced at premium.   A few of the reasons I’m planning to do this are. 1.  The turnkey provider has a waitlist and cash deals gets me higher on the list.  2.  They charge a reduced property mgmt fee for cash buyers. 3.  My thoughts are to pay cash and take out 75% of the equity to buy another property later this year when rates go down and perhaps by then I get a little appreciation and get a higher cash out from the refi.   I am open to suggestions on this as I realize this may not be the typical approach.   I figured this approach isn’t that different than financing with 25% down but I get the benefit of a lower interest rate and reduced prop mgmt cost.  I realize that there is risk in doing it this way though.  Open to your feedback and happy to chat with you.  Chris 

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Tanner Strand
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Tanner Strand
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Replied Mar 12 2024, 13:51

Hey @Chris Ross!

If you are interested, PM me and I can get you in contact with a lender that would be happy to discuss some scenarios with you!

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Jamie Parker
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Jamie Parker
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  • Memphis, TN
Replied Mar 27 2024, 20:26
Quote from @Chris Ross:

Hello, I'm going to be closing on my first SFR investment property soon via an all cash deal. After closing I'd like to do a delayed finance to use the cash for a second property. The property is in Memphis TN. I am open to any lender recommendations from those that have done the same. My thoughts are to wait until the May timeframe since I believe rates will drop a bit by then and I'll still be within the 6 month threshold for a delayed finance transaction. Is there a difference between a delayed finance or a cash out refi? They are ultimately the same thing but I know that many lenders require seasoning. Would I be better off waiting until the 6 month mark or later to do the refi? Is there a difference in rates or process? I don't have my second property picked out yet but will work with a turnkey provider once I have the funds. Any recommendations are appreciated. Thanks

There a some lenders that offer require minimal or no season for the Memphis market.