30 yrs Conventional -> Rehab (Cash) -> Refi to cash out?

3 Replies

Hey guys,

I have a couple of rental properties in the Mid West. I'm looking into buying a run down, Home Path MFH (300-400k) price range then fix it up using cash (around 100k) and my contractor who does good job at very competitive price. 

My finance is great and I have no problem securing the mortgage for the house and also have the cash to fix up the place. My questions are:

1) Can I get another 30 years conventional loan after the rehab at 80% of ARV? Can it be from the same lender?

2) How long do I have to wait after the rehab is done to refi (seasoned)? I have heard mixed stories, some say 1 years, some say right after rehab.

I have had 3 years of Landlord experience (with tax return to prove). I have searched the forum, it seems like most people go with a private lender to buy the place, then rehab and get a 30 yrs fixed mortgage to cash out. I don't want to go through a private lender.

I have also looked into HomeStyle Renovation Loan but it seems like it requires a lot more paperwork just to get approved and release the renovation payments. I also have to hire full licensed contractor which will increase the rehab cost substantially. 

Appreciate your insights.

I have done research about delayed mortgage too. It won't work for me 

1) I don't have enough cash to buy the property in cash then do the delayed mortgage.

2) Most lenders won't do delayed mortgage on the AVR

@Kerry Baird Thanks for the mention.

@Leo N. You can get up to 10 conventional loans as long as your DTI supports it. 75% of your rental income would be used to offset your PITI + HOA for the property.

To be able to do cash-out refi using the ARV, you have to season for 6 months. Then a new appraisal can be ordered and the loan be done based on the new appraisal.