How long for a cash out refi - advice before heading to the bank.

[Kyle Penland]

I have a local property that I am thinking of buying all cash...My question is once I buy it, a week later can I do a refi cash out?  The property is worth much more than the current asking price as its a foreclosure but needs a good solid week's worth of work to get it rent ready. The week would be spent doing the rehab on the property....  I haven't used this strategy yet, but was thinking about giving it a shot but wanted to know what others have to say before I go talk to my loan officer about it.  I guess i'm just curious if a property can double its value in a weeks time.  I am doing value added rehab...HVAC, plumbing, etc...  I am planning to use the cash I pull out to purchase another property...Should I drop that to the loan officer also as incentive to make this work?

[Michael Noto]

We work with a portfolio lender that wants us to have owned the property for at least 3 months & have the place fully rented and all repairs complete before doing a cash out. I think that is fair. Our loans are typically 70-75% LTV. That is on the appraised value after the property is renovated and fully tenanted.

By the time we close on the refi it is usually 4-6 months from the day we purchased it.

We tried with other bigger banks but they want 6-12 months of seasoning.  Doesn't work for our particular business model.