Does "No Seasoning" financing exist?

13 Replies

I've read and seen many advertisements regarding No Seasoning loans. But I'm running into issues finding such a lender. I purchase a home cash and am rehabbing the property out of pocket. I would like to recoup my original investment via a cash out refinance. The property will easily meet my needs at 70% LTV. However, I've contacted numerous portfolio lenders and they are all saying they will only cash out up to 80% of the COST or FMV whichever is less. Obviously the cost will be less. And they are saying I have to wait at least 90 days up to a year from date of purchase to use FMV. Does this No Seasoning to use FMV exist?

You may be able to get lenders to value the property as the lower of the cost plus rehab or FMV. At least you will be able to recoup some of your money. If you are trying to value the property above purchase price plus rehab in the first six months to a year, you may be fighting an uphill battle.

Even on a cash purchase? From what I understand, if purchased cash, you can perform a cash out refinance using FMV within 6 months of purchase (aka Delayed Financing). Or am I missing something all together?

Is it an investment property or an owner occupied property?

If it's owner, then you can do a Delayed Financing program within 90 days of purchasing it.  Doesn't work for investments though. 

There are asset based lenders who will give you a loan at 75% LTV with no seasoning. You will probably have to purchase with their line of credit where there will be points to draw down as well as higher interest rates. But they won't make you wait 6 or 12 months. Not sure if that is what you are looking for or not. Check out @bobgreen.

Is the property in California? Do you personally own it? If so, just completed one and just purchased two more that I am going to do the same thing with. My mortgage broker said it is called delayed financing. If you PM me I can provide you with his information. Depending on your particular situation we were able to get up to 80% of the appraised value of the home up to 100% of the costs we put in. Although, it does need to be all cash. You can send me a message and I will get you my loan brokers information. He works in California.

Thanks all for the replies.

This is an investment property.

Darren : I'm already working with Bob.  I was wondering if there were other portolio lenders out there as well.

Grant: Sent you a PM.

This tidbit might be helpful, are you aware a residential property can be refinanced with a commercial lender as long as the loan is in the name of a business entity like an LLC?

The commercial lender will evaluate your "investment property" by looking at the DCR ( debt coverage ratio) being at least 1.2 and ARV ( after repair value ) of between 70-80% depending on the lender.

Using Brandon's BRRRR method, after property rehabbed and rented, thus stabilizing, many commercial lenders will refi using ARV...sometimes seasoning period is 6-12 months, but most times it takes 6 months to rehab anyway.

Ask for VP of commercial department and run your scenario by them, and you might be surprised.

I need to clarify...as long as property non owner occupied and loan being made to a business entity like an LLC, a SFH, condo, townhouse, or 1-4 unit can be refinanced with a commercial lender even though they are typically thought of as residential.

Watching Cubs and simultaneously posting on BP  is a probably not a good idea.

Originally posted by @Leo B. :

I've read and seen many advertisements regarding No Seasoning loans. But I'm running into issues finding such a lender. I purchase a home cash and am rehabbing the property out of pocket. I would like to recoup my original investment via a cash out refinance. The property will easily meet my needs at 70% LTV. However, I've contacted numerous portfolio lenders and they are all saying they will only cash out up to 80% of the COST or FMV whichever is less. Obviously the cost will be less. And they are saying I have to wait at least 90 days up to a year from date of purchase to use FMV. Does this No Seasoning to use FMV exist?

 Hey, Leo. Are you saying that these lenders are willing to loan 80% of the purchase price immediately after you purchase? Can you share who these lenders are (or PM me if posting them is a no-no)? I'm in the same boat as you, but I'm willing to take whatever I can get as long as it's ASAP after closing.

@Ashley Pimsner Thanks for the response. The property is owned under an LLC and is non-owner occupied. My other challenge is the loan size. I will have about $50K into the home out of pocket and it should appraise for around $80K. With the rent it will bring in, the DCR should easily meet 1.3. Would you be able to PM me the commercial lending contacts you have? Thanks so much for your help!

@Mark Beekman Send me an email at [email protected] and I will forward you my contact.  FYI - this will only work if you purchased the property with all cash.

Originally posted by @Leo B. :

@Ashley Pimsner Thanks for the response. The property is owned under an LLC and is non-owner occupied. My other challenge is the loan size. I will have about $50K into the home out of pocket and it should appraise for around $80K. With the rent it will bring in, the DCR should easily meet 1.3. Would you be able to PM me the commercial lending contacts you have? Thanks so much for your help!

@Mark Beekman Send me an email at [email protected] and I will forward you my contact.  FYI - this will only work if you purchased the property with all cash.

Email me for a few lenders which may or may not be applicable for your area as I am in Illinois.

@Leo B. crowdfunding is potentially a solution for you. PM me if you have questions. I'd be more than happy to help

PMs sent.  Thanks all!

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