LTV to Refinance a rental property

[Eduardo Sagues]

Hi! 

First time writing here. I want to start investing out-of state. I am planning to use OneBrokerage to help me finance my first rental + some F&F hard money lending. The plan is to buy a property, remodel it and do short-term or mid term rentals in Augusta, GA. Because I'm using a pretty high leverage to get started and minimize my equity ( I understand this is a risk) the interest rate on my acquisition loan is likely going to be 11%. Once the rehab is done I'd like to refinance and grab some of the added value. What is a realistic LTV that I can get once I refinance? and what type of lenders do you recommend I go to? Most lenders I've talked to they only do 70% (traditional lenders) but with a 70% LTV I wouldn't be able to pay off my acquisition loan (clearly I wouldnt be able to cash out). Maybe this is just an issue of the ARV I'm estimating and/or the fact that coming in my LTV is high, but that is something I have some flexibility changing. However, I just want to have more or less realistic expectations on LTV and interest rates (now) to refinance given this will be an investment property.

What are others doing on this BRRR strategy

Thanks for the help!
 

[Logan Singleton]

Hi @eduardo, 

Some hard money lenders will have the following seasonings required cash-our refinances.

3-5 months of ownership: 70% LTV

6+ months of ownership: 75% LTV

Please note that the additional 5% leverage will come with a more expensive rate and closing costs.