BRRRR Refiance question

10 Replies

I tried to complete my first flip. However, the market did not cooperate so I went to plan B which is BRRRR stategy. As part of the flip I got the first two steps completed; the B(uy) and R(ehab),. Since the market was not helping I started the R(ent) step. I am now on the R(efinance) step. I have started talking to my local banks and looking online for relationships and rates. I am finding that my small local banks will loan max 75% over 20 years for a portfolio loan. One bank told me that they can sell the mortgage to get a 30 year option but the house has to be off the market for a minimum six months.

Two questions:  1. The rates I am being offered so far are 4.75 or higher for the 30 year term I have found.  Not historically bad but it is higher than what I am hearing from others.   What have some of you gotten lately for a rate 

2. Is it common to have to be off the MLS for six months before a new cash out refi can be completed.

Thanks for the help

Hi @Ames Foley ,

1) "Cash out refinance" is a rate or discount points bump, your choice which. FNMA LLPAs, which shows the discount points to hold constant the rate.

2) That's either an overlay, or bad info. That used to be a rule, but it went away. Lenders gotta keep up!

@Rigo V. I remember reading about the seasoning.  I have owned the property for just over a year.  When do most banks start the seasoning?  After purchase? Rehab? rent?  Thanks for the input

@Chris Mason thanks for the notes.  I guess it was the banks rules not Fannie Maes.

I am continuing to contact my local banks and Credit Unions.

@Ames Foley . From what I have seen, those are pretty typical right now in relation to prime right now for a refi. As far as being on/off market. Typically 6 months is the rule of thumb. I work with at least one lender that with so as quick as 90 days. This is the exception, but it does exist.

Here in Kansas City, most of what we get offered is 5% and 20 Year Amms. Banks are usually more conservative for investment properties. I know on the coasts you can get better rates and 30 year amms pretty easily. It just varies by the market.

@Sean Edrington the property is in Belleville on the west side.  I am seeing a lot of houses on the market so prices are being compressed.   That was one of the reasons  I changed strategies.   On Main Street there is a block where over 1/2 the properties have for sales signs.  So you may be able to find a deal.  What you need to make sure you watch for which I did not is the property taxes.  If you are not owner occupied the taxes go up about 20-25%.  But if you can buy right, you can make money here.  That being said I hear KC is a great market to invest in right now.  

4.75% is pretty decent for a portfolio loan IMHO, but 20 year amort will mean much higher payment.  is it possible to refi into this portfolio loan now but refi with a "normal" bank in 6 months?