Investor · stockton, CA · Member since 2014 · 34 posts · 3 votes
Hey Bp,
I was wondering if it possible to buy a house using private /hard money to get a property at a discount then resell or refinance the property to pay off the loan? I am looking for a house to buy to live in and wanted to know if this strategy would work.
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
11y
As far as your question in the topic...no. You got closer with your post though.
Yes if you buy with private/HM you can refinance just like with any loan. The issue with your idea is due to your desire to occupy. The new Dodd Frank/CFPB rules make lending to individuals very regulated. Most or all HM lenders won't lend knowing that your end goal is to occupy. If they were to do so it would open them up to possible fines from the CFPB for not following consumer lending practices.
Investor · Fort Wayne, IN · Member since 2014 · 1k+ posts · 515 votes
11y
@Carlos Powell as long as the lender is getting paid off according to the terms on the loan (note) and you are deed holder, then it doesnt matter what you do, if lender is paid in full. (refi or sell)
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
11y
As far as your question in the topic...no. You got closer with your post though.
Yes if you buy with private/HM you can refinance just like with any loan. The issue with your idea is due to your desire to occupy. The new Dodd Frank/CFPB rules make lending to individuals very regulated. Most or all HM lenders won't lend knowing that your end goal is to occupy. If they were to do so it would open them up to possible fines from the CFPB for not following consumer lending practices.
What you can do is purchase a house with either private money or conventional financing, and if you have four or less properties, you can do a cash out refinance after 6 months of owning the property based on appraised value. A single family you can pull out 75 percent value and a multi family you can pull out 70 percent of the value. If you own one to ten properties you can cash out refinance prior to 6 months, up to the total cost of the purchase price, as long as it appraises at the above LTV guidelines. I hope this helps!