Cash out refi rental property with DSCR loan

[Jephte Augustin]

I have a question

I have property I just acquired and renovated with a Fannie Mae loan. I’m looking to cash out refi, but I have to wait 12 months of seasoning before I can do that.

Does that seasoning period apply if I cash out refi into a DSCR loan?

I can see a scenario where I take on the risk of a high interest rate and less flexible terms for 5 years, so I can access my cash sooner if that option is there.

[Robin Simon]

Quote from @Jephte Augustin:

I have a question

I have property I just acquired and renovated with a Fannie Mae loan. I’m looking to cash out refi, but I have to wait 12 months of seasoning before I can do that.

Does that seasoning period apply if I cash out refi into a DSCR loan?

I can see a scenario where I take on the risk of a high interest rate and less flexible terms for 5 years, so I can access my cash sooner if that option is there.

Yes, as other people have mentioned - DSCR Lenders have prorprietary guidelines and generally offer more customized and shorter seasoning periods.

Also check out this article published last year on BP on this exact topic/question - hope it helps!

https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

BRRRR Loans: What Are the Options, and How Do DSCR Loans Stack Up?

The BRRRR method of real estate investing continues to be one of the most-used strategies in 2023. With interest rates elevated yet property values remaining resilient, finding cash flow with a reasonable down payment is an incredible challenge.

However, the BRRRR strategy (buy, rehab, rent, refinance, repeat) makes sense for a lot of investors, as value can be created through forced appreciation (renovations) and capital recycled through cash-out refinances. With rates high and competition fierce, nailing the financing piece of the BRRRR method has never been more important.

This article will explore the loan options facing BRRRR strategy investors, with a focus on the all-important third R: refinance. Specifically, we'll compare DSCR refinance loans to traditional options, namely bank or conventional loans.