BRRR Strategy Financing

[Jerry Padilla]

Recent changes to CASH OUT Financing;

- Cash out financing is available on 1-10 mortgaged properties - (no longer a limit of 6 mortgaged properties)

- Investment properties have the same LTV on properties 1-10 mortgaged properties. 75% for a SFR and 70% for a MFR. - Over 6 mortgaged properties, still require a 720 credit score - (previously at 7 mortgaged properties, the required LTV dropped another 5%)

- Conforming limits increased across the board everywhere! Here is a link to see the max for your area!

Look Up Conforming Limits For Your Area!

BRRR / BRRRR....... Buy Rent Rehab Refinance..........& Repeat

CASH OUT FINANCING

A cash out refinance is exactly what it sounds like. It is when you refinance your property and pull equity out of a property. The mortgage can either be paid off free and clear or can have enough equity in the property to make it worth refinancing and pulling equity out. Cash out refinances are available on primary and investment properties.

• The typical cash out financing is done after 6 months of owning the property, based on ARV and available for mortgaged properties #1-10. Please see delayed financing for less than 6 months after closing.
• On a primary residence you can pull out up to 80% LTV on a SFR and up to 75% LTV on 2-4 unit multi-families.
• On an investment property; A SFR if you have #1-10 mortgaged properties, you can pull out up to 75% of the equity and on 2-4 units is up to 70% equity.
• On an investment property; If you have #7-10 mortgaged properties, including subject you are required to have a credit score of 720.
• PROPERTIES LISTED FOR SALE
  For a rate and term refinance transaction, the borrower must evidence that the listing has been cancelled, and must not have been listed for sale as of the date of the application.
  For a cash-out transaction, the borrower must provide evidence that the listing was cancelled at least six months prior to the date of application.

Cash Reserves Required For Other Properties Owned by Investor;

Cash Reserve Requirements;

6 months Freddie Mac's Guide to Refinancing, including Cash Out.

Fannie Mae's Guideline to Cash Out Financing.

Fannie Mae Guideline for Cash Out, Mortgaged Property 5-10.

Comments below are appreciated!

This information is accurate as of the time of posting. Please also verify the accuracy of this information at the time you are considering these options as guidelines change.