Cash out refi before 6 months in Michigan?

4 Replies

I have recently purchased two properties, one of which is rehabbed and has a renter in line to move in. The other has not started rehab yet but will soon. Both properties are owned outright with no mortgage or liens.

I am trying to implement an aggressive growth plan but most of my cash is tied up in those properties and I am wondering if anyone knows of a lender in Michigan that will do cash out refi's prior to the 6 month seasoning period?

I am aware of the delayed financing option but I am looking for someone that will pull out 65-75% of the ARV on my properties after they are rehabbed.

@Jimmy P. in my experience, small lenders will refinance before the seasoning period has expired, but only based on purchase price as opposed to appraised price. If you bought at a steep discount, then it might not be advantageous to pay the closing costs, but then again, it depends on how much you have tied up.

Bruce

@Bruce Scannell I buy houses that need a good amount of work so yes they are discounted foreclosure a generally. But what that also does is tie up a large portion of my funds in the rehab so I need to recoup some cash to buy another one.

I think it was Fannie Mae who has a program called Delayed Mortgage, I think. Basically you can get a mortgage the day after closing as long as there are no liens on the property

I agree with Bruce, check with local, smaller lenders. Try talking to Troy Butler with First Community Bank in Grand Rapids at 616-454-2818.

In the future, you might want to consider other options such as conventional rehab/purchase loans.  This type of loan combines the purchase of a property with construction funding in a single loan for smaller rehab projects, and in a two-closing process for more expansive work. The lender will typically use a list of repairs and subcontractors to determine a ‘final’ value for the property, and schedule loan amount based on a review of the total acquisition costs (purchase + construction) and projected appraisal value.