Rehabber's How long before you Refi?

3 Replies

I am going to be ready to list my 1st FLIP fairly soon. However, as an exit strategy, I am going to refi if I cannot sell the home in a timely fashion and pull my $ back out so I can do it all over again. So the question remains how long do you guys typically wait before you pull it off the market and refi for those that employ a similar strategy? Thanks for stopping in and sharing your thoughts. Here is to wishing you all a successful 2017 in your REI ventures!

You have to wait 6 months minimum. You have to wait this long so that you can pull out more of your funds. Most large banks will do this cash out refinance after 6 months. 

If I understand you correctly, you are going to flip the house, you paid cash for it and have no liens against it, with the expectation to sell it for profit in a timely fashion. But you have concerns that if it does not sell quick enough, you plan to cash out refi it so you can jump to the next one. Correct?

For me, such a back up strategy is never in my aresenol and here is why: I either get more capital from my private investors for the next one or I drop the price so it sells quicker. If any property I own does not go under contract in the first 30 Days, that tells me i overpriced it because it can not be due to poor quality (I just don’t do that) and price conquers just about everything in real estate. Opportunity costs end up being more than taking less profit or trying to wait out time. Just my opinion based on my business model and my past history.

A refinance (cash out) for me usually takes 2 months. Then there are closing fees, etc. You will probably only get 80% of it's appraised value. I'd reduce the price like mentioned before. Or possibly add something else to the house to make it more appealing if that is an option. I would only refinance if you plan on holding it as a rental. And I would only go that route if it can produce good cash flow every month after all bills are paid for.

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