Is refinancing really that easy?

Question

When I listen to the BP podcast and read through strategies, it seems the best approach (for me) is Brrrr investing. However I always hear the focus on finding the initial funds, because of course that's the hardest part. But whenever they get to the refinancing part, they make it sound so easy. "Just go to the bank and refinance and there ya go!". But no one ever talks about the details of refinancing a property. What are the details? Do you have to have a certain amount of money in your bank account? I mean we're qualifying for a second mortgage here right? surely there is some amount of difficulty in refinancing a property. Does it require a down payment? how long does it take? Etc.

Jaysen Medhurst · Answer

@Cody Beard, yes you are qualifying for another mortgage. Of course, you'll have the income from the property to show your ability to make the payments. If you're looking at $1000 payment, you're bringing in $3800 in rent, and just dropped $20k in renovations, that's a pretty good risk for the bank.

You don't have to make a down payment, but you do have to leave 20-25% equity in the property.

Of course, there will be some paperwork and hoops to jump through. The best approach is to start looking for lenders now. Sit down with a bunch of local/regional banks/credit unions. Tell them what you're planning to do. They'll give you the details: if they do those loans, what the requirements are, required seasoning period, etc.

You want to start building the relationship and sorting through this beforehand.