Texas - Investment Property Cash-out Refinance

[Alec Vela]

Hey everyone, 

I recently purchased my first buy and hold investment property and ran into an issue with my lender. 

My lender is telling me, 40 days into the cash-out refinance process, that in Texas, you are not able to take cash out on an investment property, only on primary residences. 

From everything I’ve read, and from people that I’ve spoken with, this seems to not be the case. 

My loan is currently sitting with a hard money lender and I’m looking to refinance out as soon as possible! 

[Alex Roter]

Hey @Alec Vela I believe those are conventional guidelines. You can work with a NonQM lender (Soft/Hard/Private Money) and have no issues. 

[Eliott Elias]

You can use a DSCR delayed financing loan to be able to refi immediately. As long as the property's rent covers the mortgage you'll be able to qualify

[Andrew Postell]

@Alec Vela thanks for posting! Always great to hear from a fellow Texan. Now, this is a far too common problem in our state.  You can 100% get a cash out loan on an investment property.  And yes, even with a conventional loan...but not every lender will write them.  So make sure you are speaking with a lender that comes from another investor....or at least try to.  You would think that everyone can do this but that is not the case.  So if we lean on other investors that have already done the hard work of finding a lender that will save you the time of having to go through the process to learn the truth.  Maybe ask @Betty Cruz who she uses.  She's down in San Antonio. Thanks again for posting!

[Aaron Bihl]

You can definitely cash out with a DSCR lender....i've used a few and talked to several others. They are all about the same, pretty chill to work with but rates are going to be higher than your standard conventional loan. I would ask around, I had a mortgage through jefferson bank a few years ago and they seemed small enough to have some flexibility in what they do.

I need to hit up more local banks and credit unions, but I've been some combination of too busy and too lazy to put in that effort.

[Polo Vazquez]

I've done cash out refinances on about 4 investment properties in Texas. Most lender will only go to 75% loan to value. I actually did one with @Andrew Postell. He was able to give me 80% back. I'vef also used better.com, and South Texas Federal Credit Union. Send me a dm if you want more details.

[Lucia Rushton]

@Andrew Postell you are able to do them as well right ?

[Andrew Postell]

@Lucia Rushton I am....but the technicality here is that you aren't supposed to "self promote".  If you do then the post might get deleted. So I try to tell people what to look for and that's usually good enough.  Plenty of business to go around out there.  Just here to help if I can.

[Andrew Postell]

@Polo Vazquez thanks for the mention.  Hope all is well!

[James Wenzel]

The bank you are refinancing with does not do cash outs on investments.  You need to find another lender ASAP or just do the 75% loan now.  I have cashed out refinanced at least 20x in Texas SF investment properties.  

[Haresh Patel]

@James Wenzel I have been able to do a couple with Finance of America. 75% LTV. Took about 45 days.

[Adrian Mahdian]

@James Wenzel I just read your profile and I am interested in commercial RE, if you were starting over again, what would you do? 
Does the financing (Cash out REFI) process for a 2-4plex look very different to bigger units that you've done? 


@Polo Vazquez I sent you a DM! I am interested to see what McAllen has to offer, was looking at a few videos and stats about it and I like it! San Padre beach is right there too so I am a bit bullish on it because more tech jobs will want the lifestyle! 

[Fernando Martínez]

Quote from @Eliott Elias:

You can use a DSCR delayed financing loan to be able to refi immediately. As long as the property's rent covers the mortgage you'll be able to qualify

Eliott any recommendations on DSCR lenders or other Non QM's here in Texas that can do a cash out refinance on an investment property

[Jay Hurst]

Quote from @Fernando Martínez:

Quote from @Eliott Elias:

You can use a DSCR delayed financing loan to be able to refi immediately. As long as the property's rent covers the mortgage you'll be able to qualify

Eliott any recommendations on DSCR lenders or other Non QM's here in Texas that can do a cash out refinance on an investment property

 @Fernando Martínez There is NO law regarding cash out non-owner occupied properties in Texas. The only laws about equity loan in Texas refers to owner occupied properties. A lot of national or out of state lenders simply say they cannot be done because they do not do them, but that does not mean it cannot be done. We make full doc and DSCR cash out on investment properties with no issue.

[Jack Mawer]

That is certainly not the case - I assume you have it figured out by now, but happy to chat about financing options if you are still interested!