I am looking for an advice.I am planning to purchase a fixer upper in SFO bay area for $460k SFH. The comps in that area are going at $560K . What would be good strategy on this property.
1) Buy this property at $460 K with conventional mortgage and spend 25k in rehab before renting this out .
2) Buy this property at $460 K all cash , rehab and rent it out and then get cash out on the property 2 months at appraise value of $560k after the purchase to get the max ROI.
If I go with option 2 is there any lender who can refinance a property 2 month after the purchase?Will the lender take $560 k value of house or $460K? Based on my understanding the lender takes lower of market value and purchase price if you refinance the property before 6 months of purchase ? Please share your feedback.
@Sameer Jain Cashing out under delayed financing exception you won't recover initial investment according to information provided. Even though you wait for 6 month you won't recover initial investment.
@Harjeet Bhatti I am okay to leave some money in the deal. Is it possible to do cash out refinance it less than 6 months?
@Sameer Jain Yes you can refinance any time.
@Ann Rosen I have sent a mail to you with my contact details. Please let me know the details.
Many lenders are competing with one another over their cash out refi seasoning guidelines. Many will do them right away but restrict the loan to be based off of the purchase price + rehab costs rather than the appraised value until either a 6 or 12 month seasoning period. However, a few are coming out and going off of appraised value much sooner (2-3 months) as long as the person on title remains the same.
@Alex Bekeza I would like to know more about this as well. Could you send me some info?
Yes, a cash out can be done after 30 days on the after repair value (new appraisal) if it is a hold. Of more concern would be your DSCR. Message me.
Yes I will PM it is hold with comps going at 100 k more than the acquisition cost .