Cash Out Re-fF in Louisville, KY

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Cash Out Re-fF in Louisville, KY

Melissa Dry
South Florida · Member since 2019 · 5 posts · 0 votes

Good evening everyone! 

I am just starting out in the REI world, and was thinking of taking a cash-out refinance mortgage on a free and clear home in Louisville, KY to get started buying properties. Does anyone have any advice, either from experience or general trade knowledge, on lenders they've worked with in the area, or if this is even a good idea?

Thanks in advance for any advice!

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Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
7y
Originally posted by @Kyle Schlosser:

@Alexander Felice It was my interpretation that she was going to use a Heloc to start buying properties and that’s what brought your podcast to mind. I apologize if I made a misstep. Still learning the ropes.

 ah yes, in that case delayed finance very much may help! 

I'm learning too dude, no need for apologies ;) 

[email protected]Podcast Guest on Show #301
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  • Shaun Weekes
    Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
    7y
    Originally posted by @Melissa Dry:

    Good evening everyone! 

    I am just starting out in the REI world, and was thinking of taking a cash-out refinance mortgage on a free and clear home in Louisville, KY to get started buying properties. Does anyone have any advice, either from experience or general trade knowledge, on lenders they've worked with in the area, or if this is even a good idea?

    Thanks in advance for any advice!

     This is a great idea and I would just say know what your plans and goals are before you execute the refinance.  This way you'll know where the money will be going and more importantly how much money needs to be allocated to your new purchase.

    I hope this helps.

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  • Jason James
    Investor · Louisville, KY · Member since 2014 · 202 posts · 111 votes
    7y

    @Melissa Dry Why not do a line of credit (HELOC)? Should be lower fees, quicker access to cash and you could use this line of credit over and over. Use the BRRRR method! Keep that money rolling therefore deals as well.

    Also make sure you have good knowledge of the market you want to invest in. You make almost all of your money in real estate when you buy so buy right! 

    1Reply
  • Melissa Dry
    OP
    South Florida · Member since 2019 · 5 posts · 0 votes
    7y

    @Shaun Weekes Thanks so much for the advice!

    @Jason James Thanks for the suggestion! I did think about HELOC, but it didn't dawn on me to invest with the line of credit vs. cash. Can you recommend any local lenders you've worked with?

    0Reply
  • Jason James
    Investor · Louisville, KY · Member since 2014 · 202 posts · 111 votes
    7y

    @Melissa Dry No problem. Shot me a private message and I can get you some contacts. Don't want to put them on here as they may or may not want their info shared with the public. If there is anything else I can help with feel free to reach out. Thanks 

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  • Kyle Schlosser
    Specialist · Louisville, KY · Member since 2017 · 166 posts · 154 votes
    7y
    Originally posted by @Melissa Dry:

    @Shaun Weekes Thanks so much for the advice!

    @Jason James Thanks for the suggestion! I did think about HELOC, but it didn't dawn on me to invest with the line of credit vs. cash. Can you recommend any local lenders you've worked with?

    Check out #301 of the BP podcast. @Alexander Felice 's info on modifying the HUD is gold.

    2Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    7y
    Originally posted by @Kyle Schlosser:
    Originally posted by @Melissa Dry:

    @Shaun Weekes Thanks so much for the advice!

    @Jason James Thanks for the suggestion! I did think about HELOC, but it didn't dawn on me to invest with the line of credit vs. cash. Can you recommend any local lenders you've worked with?

    Check out #301 of the BP podcast. @Alexander Felice 's info on modifying the HUD is gold.

     not sure that would be applicable in this instance.

    what I do is modify the HUD so rehab costs are included and I can refinance out QUICKLY after purchase. In OP's scenario they already own the building and HUD is never able to be changed after closing. appreciate the shout out though!

    for OP: regular investment loans through fannie are available at 75% all-day-long. HELOC is an option but you'll find banks try to be very conservative on HELOC appraisals (by design) and it's much harder to find a bank that will do a LOC on non-owner occupied. It's not impossible, just harder.

    [email protected]Podcast Guest on Show #301
    1Reply
  • Kyle Schlosser
    Specialist · Louisville, KY · Member since 2017 · 166 posts · 154 votes
    7y

    @Alexander Felice It was my interpretation that she was going to use a Heloc to start buying properties and that’s what brought your podcast to mind. I apologize if I made a misstep. Still learning the ropes.

    1Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    7y
    Originally posted by @Kyle Schlosser:

    @Alexander Felice It was my interpretation that she was going to use a Heloc to start buying properties and that’s what brought your podcast to mind. I apologize if I made a misstep. Still learning the ropes.

     ah yes, in that case delayed finance very much may help! 

    I'm learning too dude, no need for apologies ;) 

    [email protected]Podcast Guest on Show #301
    2Reply
  • Melissa Dry
    OP
    South Florida · Member since 2019 · 5 posts · 0 votes
    7y

    I

    0Reply
  • Melissa Dry
    OP
    South Florida · Member since 2019 · 5 posts · 0 votes
    7y
    Originally posted by @Alexander Felice:
    Originally posted by @Kyle Schlosser:

    @Alexander Felice It was my interpretation that she was going to use a Heloc to start buying properties and that’s what brought your podcast to mind. I apologize if I made a misstep. Still learning the ropes.

     ah yes, in that case delayed finance very much may help! 

    I'm learning too dude, no need for apologies ;) 

    I appreciate all of your suggestions. I think I should make my situation a bit clearer....

    The property we are looking to pull equity out of is currently being rented, (obviously we are out of state and non-primary residence). I have been calling local credit unions in Louisville, and utilizing the references (thank you so much!) other posters have sent my way, but they do not typically do HELOCs on the non primary, like @Alexander said. 

    Do you think I should keep calling around, or try to look into the Fannie mae loan you mentioned? Would you be able to elaborate a bit more on it? 

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  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    7y

    Hard to say what you should do, have you asked around with fellow real estate investors in your area to see if they have any good bank relationships? That's what I would do. It's most likely that there is a bank in your area that does HELOC on investment loans, finding the person may be tough, but it seems like the best approach.

    doing a full refi isn't a bad idea. However the LOC comes with the benefit that it only accumulates interest when accessed. So you can get the heloc and sit on it until you need to spend it. If you do a refi you're going to get the money and start paying interest immediately. If you're sure you can line a deal up fast then not a big deal, but if the money sits around for a while it starts to become inefficient.

    hope I'm making things better and not more complicated lol! 

    [email protected]Podcast Guest on Show #301
    0Reply
  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    7y

    @Melissa Dry you've received a ton of great advice. 

    If you're having trouble going the conventional route, there are non-bank lenders for a cash-out refinance or potentially a HELOC (but that's more rare). How long have you owned your rental for and what's the current value?

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