BRRRR - ReFi Cash Out

5 Replies

Hi I just purchased a duplex from a wholesaler with cash and am redoing one side right now and I want to cash out refinance.  I am having trouble with someone who would do the deal with me, I have excellent credit, a good salary, just curious if anyone has a bank or credit union or work with.  My understanding is my max cashout refinance is 75% from a traditional bank.  Any suggestions would be great.  

                                  @Andrew Wilson a couple of things here:

                                  1. If you are using a Fannie/Freddie loan (those are the ones with the lowest rates on a 30 year fixed) then the cash out limit on a 2-4 unit property is 70%
                                  2. If you are seeking cash out in the first 6 months, Fannie/Freddie loans will have some pretty detailed restrictions.  Mainly that ifyou will be limited to the amount of….
                                    1. Your purchase price + closing costs (costs when you purchased the home) OR....
                                    2. 75% of the “After Repair Value”…
                                  3. WHICHEVER IS THE LOWER AMOUNT (super important)

Hmm, sorry about the format there.  To continue...

3. If you are still renovating the property a Fannie/Freddie loan will require all the renovation work to be completed before it can close.

4. I wrote a pretty lengthy article on some of these restrictions and how to properly structure the deal HERE

5. If you think a Fannie/Freddie loan is not the right loan for you to get right now then a smaller, local bank close to the property location might be the right solution.  I would post in that State Forum, here on Bigger Pockets, "Looking for bank near X city" and see if some locals might give some good advice.

I hope this wasn't too much information (and please forgive me on the formatting) but feel free to tag me with any questions.

Thanks!

Originally posted by @Andrew Wilson :

Hi I just purchased a duplex from a wholesaler with cash and am redoing one side right now and I want to cash out refinance.  I am having trouble with someone who would do the deal with me, I have excellent credit, a good salary, just curious if anyone has a bank or credit union or work with.  My understanding is my max cashout refinance is 75% from a traditional bank.  Any suggestions would be great.  

Where is the property and what condition is the other side in?  Is it leased?