Cash out refi for non owner occupied property

[Shaun R.]

Lenders... if I buy an investment property that appraises for $125k for $100k cash, could I do a cash out refi and get 80% (my $100k) back out?

[Andrew C.]

Not so simple answer, yes and no.  For a conventional mortgage (Freddie/Fannie) not likely, though you could borrow 75% of your purchase price, so cash out $75K minus any associated costs/fees.  Research “delayed refinancing” which generally requires 6 months of seasoning (ownership) in order to use appraised value vs purchase price (plus improvement expenses). 

Private money/Commercial lenders who are not bound by Freddie/Fannie rules often will let you borrow right away with little or no seasoning (often 1-30 days after purchase) and borrow 75% LTV of appraised value, but rates are often more like 6-9% vs about 4-5% for conventional financing (Freddie/Fannie backed loans).

I hope this helps. I’m just an experienced borrower who has done a lot of shopping rates, fees, and terms.  Feel free to private message me for additional discussions. 

Andrew