BRRR - Method. Anyway around 6 month seasoning?

Question

I am looking for advice in regards to how to get around the 6 month seasoning for a cash out refinance. Does anyone have a bank that I can work with. I am running into a road block. Have called several with no luck. (or maybe some other options to do the same). Thanks in advance.

Keep investing =)

Kevin Romines · Answer

As @Cassi Justiz mentioned, if you paid cash for the property and there is no lien against the home, then you can do a delayed financing refinance through Fannie Mae at the best possible rates. You are limited to the original purchase price + refinance closing costs to a max. of 75% LTV as a rental property.

The next option after that would be a Non-QM loan. These are not hard money loans, they are investor loans. They have rates between the Fannie Mae rates and as much as 3% higher or so, but much less than hard money. You can get 5/1, 7/1, 10/1 ARMS or 15, 30 year fixed rates on these programs. Most don't have any seasoning requirements, however some do? Your best to get together with a lender that has these programs available (typically a mortgage banker or a broker) I would also try to make sure the lender consistently works with a lot of investors. They will know best how to close the deal and what programs to show you.

The last alternative is to just wait out the 6 months and get a standard Fannie Mae cash out refinance.

I hope this helps?

Cassi Justiz · Answer

@Chris Hosmer

I was the agent representing the buyer on the deal. He tried a local mortgage broker first but due to several issues he ended up going with an online bank. This was the lender he used. He had a positive experience with them. The house was in OKC, the buyer lived in TX and the lender was out of Chicago.

https://www.rate.com/loan-expert/orenorkin

Bob Woelfel · Answer

You could talk to a commercial lender with a local or small regional bank in your area.  Many will not have seasoning.  We have refinanced out of a number of BRRRR properties we've done in just a few months.  Good luck.

Jason D. · Answer

@Freddie Williams try asset based lenders. They are more expensive but less seasoning is required in most cases. Basically, they are hard money lenders that also do long term financing

Curtis Thygerson · Answer

I know Limaonecapital just came out with a new product specifically for the BRRR method, Basically they give you a fix and flip loan based on the 90% of the purchase price and then change it into a long term 30 year rental loan based on the ARV, so it is possible to get all your money back and more, and only have one closing and not wait for it to be seasoned. I've used Limaone before, not for this loan, they are pretty good. just maybe something to think about.

Steve Vaughan · Answer

Sounds like a ton of nap-disrupting work and frustration.

Why the rush? 6 months is a drop in the bucket of an RE career.

Brit F. · Answer

Just to clear up some terminology confusion...It's known as the "delayed financing exception".  If the situation meets the exception requirements, any lender who originates conforming loans should allow you to do the CO-refi.  You can read up on the exception requirements on Fannie Mae's site:

https://www.fanniemae.com/content/guide/selling/b2...

A few months ago, I used a random .com lender on a CO-refi that met the exception requirements, and it was fine.  If your lender won't do it, it's likely because the situation doesn't meet Fannie's requirements.  On the other hand, if the lender simply isn't aware of the exception, find another lender.

Mitchell Zobel · Answer

@Cassi Justiz If I we’re able to set up a short term seller financing agreement, do you know if the delayed financing would then still be on option? Seller financing instead of purchasing with cash in your example. Thanks!

Chris Hosmer · Answer

@Cassi Justiz What bank did you work with to do the delayed financing?

Jason D. · Answer

@Freddie Williams

Lending one is a hard money lender with 90 day seasoning for long term refinancing

BRRR - Method. Anyway around 6 month seasoning?

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