House Hack Reno Financing

[Jane Johanson]

Terms agreed in NJ yayy!! Agreed upon purchase price: 5% below list! Yayyy!

Here's my question: we plan to close 6/30 and move in and hold. PP: $515k + reno: $50k. I am putting 10% down. ARV: $600,000.

This is where I get foggy. So flash forward 6 months. 1) How do i structure a refinance without more out of pocket? 2) if prop purchased under my llc, will that preclude me from trad financing in 6 months? Thanks all!!!

[Stephanie P.]

Originally posted by @Jane Johanson:

Terms agreed in NJ yayy!! Agreed upon purchase price: 5% below list! Yayyy!

Here's my question: we plan to close 6/30 and move in and hold. PP: $515k + reno: $50k. I am putting 10% down. ARV: $600,000.

This is where I get foggy. So flash forward 6 months. 1) How do i structure a refinance without more out of pocket? 2) if prop purchased under my llc, will that preclude me from trad financing in 6 months? Thanks all!!!

Hey Jane

You've got some issues going on here.  I'll try to break them down. One question is:

Are you buying with hard money and then deciding to move in?

Here's what I see:

• If the ARV is $600,000, your max cash out refinance in six months in an LLC would be 75% or $450,000
• If your numbers are right, 515K purchase and 50K reno, you're buying too high by more than 100K.
• You won't get conventional financing with an LLC.
• Use 70% of the ARV as a guide for end financing.
  

For an owner occupied property, your solution would be to use an FHA 203K that will cover the renovation and not have to refinance (if you're in an area that will accommodate a high balance loan).

Stephanie