Cash out refinance question??

Question

Is it possible to get 80% LTV of the APR, when doing a owner occupied Cash out refi? If yes does anyone know of a lender in the Saint Louis, MO area that does it??

Scot Howat · Answer

Delayed financing only works when the house was bought with cash.  And it has to be your own cash.  If you received any loans or gifts (friends/family) they will deduct that amount from what they will lend you.

Cash out at 80% is the max most lenders will go, but you shouldn't have a problem finding a lender that will do it.  You may just want to have some documentation to support the higher value when the appraiser comes by.  Give him a copy of some comps and a list of all the repairs you did and how much they cost.  That should help.  If it still comes in low, get a 2nd appraisal and a value opinion.  It'll cost you another $300 or $400, but it could get you the value you're looking for.

ARMON PHILLIPS · Answer

Ok. Thanks for your response. What i plan on doing is buying a  distressed property in a excellent neighborhood with cash. Finance the rehab. Then go get a cash out refi (hopefully 80% LTV of ARV) on the new and improved home and live in it. This will be my first investment. Is there any roadblocks that i may not be aware of? Any suggestions on the strategy?

@Michael Herr @James Wise @Joe Impagliazzo

Chris Simmons · Answer

What is delayed financing?  John Truong

ARMON PHILLIPS · Answer

John Truong

Thank you. I am going to look into that. I really have my heart set on 80% LTV though.

Ben Stout · Answer

I'm looking at getting some cash out and keep running into walls. It seems that financing has really opened up in terms of banks and credit unions offering me mortgages on up to 10 properties, but I keep hearing that "If you own 4 or more properties with mortgages, we cannot do cash-out refinances." Do be aware that once you hit that 4 house mark you'll have to get creative.

ARMON PHILLIPS · Answer

Thanks @Scot Howat

John Truong · Answer

Here is the BP discussion: http://www.biggerpockets.com/forums/50/topics/148991-post-an-example-of-your-creative-financing-deal-youve-done

John Truong · Answer

@Chris Simmons  I have not done it yet. I just saw it discussed in BP. Here is an article about it: http://themortgagereports.com/14208/delayed-financing-mortgage-cash-out

John Truong · Answer

@ARMON PHILLIPS  Why don't you try the "delayed financing" route? You don't have to wait 6 months, but it's 70% ARV. I have seen several BP threads discussing it.

ARMON PHILLIPS · Answer

I have no problem with waiting six months but I really don't want to do twelve. The next phase of the plan is to repeat the strategy except with a quad and get 60-70% LTV on ARV. I wouldn't mind 60 because I think that would help my cash flow. Fortunately, I have relationships with a couple contractors and an appraiser that can give me suggestions during the rehab process.

Cash out refinance question??

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