HML on a multi-family and refi cash out after

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HML on a multi-family and refi cash out after

Dalwin Garcia
Rental Property Investor · Lyndhurst, NJ · Member since 2017 · 47 posts · 13 votes

What's going on everyone!

Looking for some advice/guidance here. We're going to be exploring HML soon. I've heard of people using HML to purchase and rehab a house and then refi out to pay off the HML. But has anyone ever used HML on a deal to then refi and CASH OUT? If so, please shed some light! This seems odd to me because in a perfect scenario you would get a HML to fund 100% of your deal with no money out of your pocket, rehab the house while paying your monthly interest payments to the HML, refi a few months later to pay them off but also cashing out and getting a nice chunk of cash? All while not coming out of pocket at all??? Is this even possible? Again, this is just an example, but I have heard of people getting 100% of their deals funded with no money out of their pocket. Someone please shed some light, I'd really appreciate it!

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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
8y

Very possible.  I just bought a property w/o a traditional lender for $2.15m  Put in $450k.  So $2.6m total.   It appraised for 3.6m, I took out $2.8m on a new loan.  So I own this property with zero out of pocket, and $200k in my pocket from the bank, and have a nice cash flowing property.

From the time I bought to the day I refinanced was under 4 months. 


Are those deals easy to find?  no.  But financing is there when you do find the deals. 

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  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    8y

    Very possible.  I just bought a property w/o a traditional lender for $2.15m  Put in $450k.  So $2.6m total.   It appraised for 3.6m, I took out $2.8m on a new loan.  So I own this property with zero out of pocket, and $200k in my pocket from the bank, and have a nice cash flowing property.

    From the time I bought to the day I refinanced was under 4 months. 


    Are those deals easy to find?  no.  But financing is there when you do find the deals. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Cody L. how much cash did you have to have for the HML to get them to fund your purchase ?

    did you do it with not a dime out of your pocket ?  

    the BRRR method sure works great … although usually takes some liquid capital to pull off unless you have those sweat hart relationships that are EARNED over the years...

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  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    8y
    Originally posted by @Jay Hinrichs:

    @Cody L. how much cash did you have to have for the HML to get them to fund your purchase ?

    did you do it with not a dime out of your pocket ?  

    the BRRR method sure works great … although usually takes some liquid capital to pull off unless you have those sweat hart relationships that are EARNED over the years...

    I have people I know that do HML. I don't know what % they'd have asked of me on this deal. 10% maybe? Less for me, maybe more for a 'stranger'. And if I were starting, I'd have to get some F&F money for the rest or at least part of the rest -- or done this on a smaller scale.

    I posted about this deal in another tread and I did admit there was some "Cheating" (in terms of doing the deal in a way most people can't) -- I just paid in cash using my own money.    I keep plenty of capital dry for going in aggressive, paying cash, fixing up, and doing a refi to get all that cash out (and at times, like this deal, and then some).   Then I have dry capital to rinse/wash/repeat as my portfolio grows.  

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