Is a Cash Out Refi Smart In This Climate?
Hey fellow BPers,
I have 2 properties inside an LLC and have found the refinance part of the BRRR strategy to be the toughest yet. I've taken every precaution to setup my business right and limit my personal liability, but in doing so it seems like I've turned off 95% of the lending world. My best offer right now is 5.125%, 30 year, 75% LTV with a 2% origination fee as well as a $299 app fee, 595 due diligence fee, and add on the cost of appraisal.
Rate my refi if you will. Is this worth doing? I'm estimating I'm going to eat $7,000-8,000 in fees and my cash flow will drop to about $300 per property accounting for maintenance contingency.
SFR| Value | $165,000.00 |
| LTV | 75.00% |
| Loan Amount | $123,750.00 |
| Rent | 1650 |
| Taxes | 1882 |
| Insurance | 750 |
| Dues | 0 |
| Rate | 5.125% |
| Balance | 123750 |
| Loan Payment | $673.80 |
| Total PITIA | $893.14 |
| Residual Income | $756.86 |
| DSCR | 1.847 |
- 30-year fixed, 5 year prepayment penalty (1% of prepaid balance)
- 75% LTV at 5.125%
| Value | $175,000.00 |
| LTV | 75.00% |
| Loan Amount | $131,250.00 |
| Rent | 1725 |
| Taxes | 2232 |
| Insurance | 744 |
| Dues | 0 |
| Rate | 5.125% |
| Balance | 131250 |
| Loan Payment | $714.64 |
| Total PITIA | $962.64 |
| Residual Income | $762.36 |
| DSCR | 1.792 |
- 30-year fixed, 5 year prepayment penalty (1% of prepaid balance)
- 75% LTV at 5.125% (the same for both scenarios)