Updated over 8 years ago on . Most recent reply
Refinancing a Hard Money Loan
Hi all. New member here to BP.
So I found a deal on a Single Family Residence. Its selling for 120K after estimated closing costs, cash only, in a neighborhood that is valued at lowest price 250k. Needs work roughly 35k.
I want to purchase not as just an investment but as my primary residence. All the math checks out. The issue I am having is the financing.
I am a licensed realtor so I ran my own comps and I went with bottom prices. Avg price for the neighborhood is roughly 300k.
The financing is a bit of a mystery to me in wholesaling sense as I am mainly accustomed to conv, fha... etc.
From what I've read here you can get a HML to buy the cash only property, and then refinance. Very exciting! BUT, after further research i find that most banks have a seasoning period of roughly 6 months... not so exciting. at 12-15% interest a month on the HML thats killer.
so for the TL;DR
I want to Buy and repair Cash only property roughly 155k. Then Refinance said property with a standard 30 year loan Asap after repairs. Is this possible? What pitfalls am I failing to see? best and worst case scenarios?
P.S.
I also worked for years as a contractor and have many relations in the construction field to make the repairs happen quickly.
Most Popular Reply
Refinancing out of hard money, and into Fannie money, has no seasoning period, provided you aren't looking to pull cash out. Rate/term refinance only.
REI and BP members are asking about cash out refinances 9 times out of 10, hence everyone thinking there is a seasoning requirement. You're that 10th person out of 10 that's just happy to be out of hard money.
One thing to check for is if your current HML has a prepayment penalty.
Touch base with @Melvin List, he lends down in Florida.