What's the deal with Cash Out Refi?

Question

I'm looking for a cash out refinancing for a 2 family. Property is valued at around $550K to $600K. I bought it for $450K about 3 months ago and renovated it. I have a high credit score. I'm looking for an 80% LTV cash out refinancing at the 6 month mark that is at a 30 year fixed rate. Anyone know if this exists? Seems hard to find....and I'm not talking about finding it from a private lender at an high interest rate.

Also is 75% cash out refi only on purchase price and renovation costs or does anyone offer it at appraised value? Seems like this does exist but can you get it at the 6 month mark? Any recommendations appreciated.

Michael Doherty · Answer

@Daniel Green I am currently doing a cash out refi on s duplex as well. The best terms I found (so far) are from a lender here on BP.

Let me know if you want his contact information.

30 yr fixed

6.25 @80% ltv or 6% @75% ltv

2 pts to close

30 day seasoning from date of purchase

Can close in LLC

Bryan Blankenship · Answer

@Daniel Green Yup, it exists! My clients do it fairly regularly. It's a fantastic way to keep the ball rolling and keep investing in more properties. They use the appraised value.

It's a win-win! :)

Alex Bekeza · Answer

@Daniel Green and @Michael Doherty There are commercial "asset-based" products out there that will cash out as high as 75% LTV as early as 90 days seasoning below 6%. LLC vesting is accepted there as well. No Tax Returns, No personal income verification. Just based on FICO and subject property cash flow.

JD Martin · Answer

75% is generally the maximum on a cash out investor property (in my experience). What you are asking for does exist at that level. The cash out is on appraised value after seasoning (6-12 months depending on bank).

Salvatore Lentini · Answer

@Daniel Green - most of the lenders I work with to grow my portfolio of residential and commercial properties will do 75LTV on refi. Some will do 80LTV in certain situations. (No tax returns or W2s required from most of them) Message me if interested.

Nick Sansivero · Answer

@Michael Doherty Hi Michael, I just saw your post above about a lender with 30 day seasoning cash out refi. I would love to get their contact info if you still have it!

Deanna O. · Answer

Re HELOC;

Good news is that small local banks even in rural CA are pretty willing to do 70% on investment property.

Bad news is tax laws have changed, so what you spend the $ on now matters.

If you use it for a refi just to get the cash out (and say go party in the Caribbian) it is NOT tax deductible (vs a regular refi). If you use it for major improvements on the property that has the HELOC, it IS tax-deductible

If you use it to purchase another property it MAY be deductible as a business expense for the 2nd property, but NOT as a business expense for the original property (again, unlike a regular refi).

All this because, um.....we obviously need taxes to be more complicated by having to do interest tracking. Ugh.

Brian Ellis · Answer

You can find it with a non-agency backed loan. But I would advise against that. Rates a lot higher....

Best option would be a HELOC @ 80% LTV.

Daniel Green · Answer

I guess what I need to hope for is that appraised value is on the higher end and get 75% cash out refi....instead of 80%.

Daniel Green · Answer

Guys: I'm just not seeing ANY 75% LTV or 80% LTV (the dream) cash out refinancing for investment properties. It's all 70% LTV. Which is kind of a bummer because it means I won't get as much cash out of the rehabbed 2 family I bought and fully rented out 6+ months ago. I believe the guidelines for those loans just recently changed. Any one else coming up again this?

What's the deal with Cash Out Refi?

What's the deal with Cash Out Refi?

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