100% Cash out refinance

[Alexander Lee]

Hey everyone,

I've been following Bigger Pockets for about 4 months and it's been awesome so far, Love the hustle all over the country.

I recently purchased a home as a rental under market value from a friend of a family friend, and fortunately have great renters in there. They'll be there for atleast 2 years, looking to the rehab once they move out and then do a cash out refinance to pull some of the equity out and continue the cash flow.

With that being said I've been obsessively looking for deals in my market (Maryland/DMV) over the last few weeks. The market here has been hot, but it's rare to find deals under market value, compared to some of the mid west and southern states I've heard about with $30-100k homes

I've been doing research on Hard Money, Personal Lines of Credit for additional financing options and had a few questions that hopefully this awesome community can help answer.

I have high credit 740+ and a strong W2 income (150k-200k+/year), low DTI, so qualifications shouldn't be an issue. I've seen videos on Bigger Pockets and other investors talking about 100% cash out refinances, where I know generally it's 75% or 80%.

I'm not sure if it differs from state, or market but has anyone done 100% conventional cash out refinances or cash out refinances in general during these covid times?

Any thoughts, comments and advice is welcomed!!

Thank you again ☺️

[Brent Coombs]

Originally posted by @Alexander Lee:

@David M.

Hi David, thanks for your reply. Yes I am referring to BRRR. But I guess what I was getting at was banks aren't allowing a true 100% refinance, mostly 70-80% LTV. It's challenging to find deals in the suburbs of MD where the ARV is 80%+ of the original purchase price. So that 20%-30% equity left in the home eats away at the cash out profits and leaves my cash in the home vs taking totally out.

So I was asking whether people are getting true 100% cash out refinance from lenders or just the fact the ARV of their project is so much that even with 70-80% loan value, you're able to take 100% of your invested money ($$ down and rehab) in the project out.

By asking "whether people are getting true 100% cash out refinance from lenders or just the fact the ARV of their project is so much that even with 70-80% loan value, you're able to take 100% of your invested money ($$ down and rehab) in the project out", they are the same thing!

ie. 100% cash out refinance means 100% of your invested money (including the original loan against it).

ie. 100% cash out refinance does not mean 100% of ARV. Get the difference?

Just how far under market value did you get it for?  Not 20-30% off actual value?  Cheers...