Next steps after rehabbing: Pull the money out or payoff

7 Replies

I purchased a foreclosure with cash at a auction. I put in about 25k of my money, and I want to pay myself back. This is a single family dwelling. What would you advise as my options?
@Lydia Bolling BRRRR Assuming you plan to keep his as a buy and hold rental... Get it rented, and refi your cash rift beach out to do it again. I prefer to go the commercial loan route. Around 5% 20 year wirh a resy after fIrst 5. 80% out wIrh force apprecIatIon can yIeld toy a very nIce return!
@Lydia Bolling my experience has been great. I work with the same loan officer and I think that makes a huge difference. The loans are usually based off of the profit the property will generate. Initially, you will likely be required to sign a personal guarantee as well. The nice thing is that I provide my personal financial statement every 6 months and that’s it. Meaning no credit pulls or applications every time I refi a deal.

Lydia,

Perfect. I would check with a local community bank in your area. With commercial financing you can expect the lender to qualify you based on credit score and personal debt to income rate, and cash flow of the property. Typically lender will require property to debt service 1.2/1 - meaning if the mortgage payment including taxes and insurance is $1,000, monthly rents must be at least $1200.