Example- Buy a house for $40k. Cost 10k to fix it up, then house appraises for $90k. If you put down 20% on the original loan, then you have a loan amount for $30k on a house worth $90k. Can you refiance is or take a heloc on the ARV of the house?
Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
14y
. . . just to chime in, depending on the lender you are using, you CAN refi as soon as the rehab has been completed.
The problem is that most lenders have fannie mae overlays that require seasoning. That being said, not all lenders have these overlays. I have found two lenders who do not require any seasoning on the property before you refi at ARV.
My advice would be to check with lenders in your market before deciding on how to proceed. Implementing the strategy you laid out is a great way to grow your business quickly. The trick is finding the right lender and then being able to qualify for the loans. The more fannie mae loans you get the harder it is to get funding, especially if you have more than 4 loans.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
14y
Don't give up after talking to one or two lenders, either. You may have to talk to a dozen or more banks to find loans that meet your needs. A mortgage broker who really understands investor lending can be a big help, too.
The FDIC Institution Directory can be handy, too. Look for smaller banks in your area that show real estate loans on their books.