Investor · Clemson, SC · Member since 2008 · 198 posts · 156 votes
I'm working on a blog post about real estate financing, and I'm curious how people have financed their latest 1-2 rental purchases. I'd like to do a rough survey of what sources are used most.
So, can you tell me your type of loan, like:
traditional mortgage types (FHA, VA, conventional)
hard money
commercial mortgage (like a portfolio loan or secondary market commercial)
private money
HELOC
Seller financing
Personal savings
If you did a BRRRR deal, you can list both the purchase and refinance source.
And if it was a traditional mortgage, hard money, or conventional mortgage - what company did you use to originate the loan?
Thanks for your help! I hope the answers are informative for everyone else who just happens to read this post as well.
Hi Chad,
We refinanced a unit from a 15 year fixed to a 30 year fixed conforming while cashing out the down payment required for our newest unit.
We explained to the seller via our broker what we were doing so did not put down earnest money or any preliminary deposit out of pocket.
All closing costs were rolled in the the new unit’s loan.
Other than the usual paperwork frustrations the overall approached worked well.
We refinanced a unit from a 15 year fixed to a 30 year fixed conforming while cashing out the down payment required for our newest unit.
Thanks Jonathan! So, you refinanced an existing unit and pulled out cash to use for the new purchase. Did you get any financing on the new purchase or was it 100% cash? If so, what kind was it?
Hi Chad,
Yes, we refinanced a unit to buy a new unit.
Each property was a single family home.
Both were financed ~75 LTV.
We used 30 year financing to lock in long-term, low interest rate funds for both houses.
Each loan was just less than jumbo.
The refi rate was 50 basis points higher than the purchase rate.
The original equity now supports $1.2mm of value (2 houses) up from $650k (1 house) in 2016.