Flipper/Rehabber · IL · Member since 2021 · 100 posts · 49 votes
Hello, i have just recently bought 2 properties in which im looking to do a cash out refi to pull some equity back out. Here is the twist. Im 19 years old, both are bought through a hard money lender and im looking to get out of both and pull equity out. The first one is a single family home, bought for 95k, put 20k into it, now its worth 160k, and i have a tenant in paying me 1350/mo. The second one is a single family home, i bought for 150k, now it’s worth in the neighborhood of 190k. I have a tenant paying 2000/mo. I want to do the cash out refi alone and not have my dad attached, i have credit, but its not super strong. Is this possible for me to do? If so, does anyone know a bank/ lending institution who can help me get this done. Thank you all!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
4y
@Caden Wakim the short answer here is "yes" you can do this without your father (at least, in theory). I'm assuming you have no job so it would increase your chances of success if the properties were long term rentals. It's not mandatory...but it would increase your chances. The thing I would do is consult the local real estate investors in the area. I appreciate anyone who is trying to do business but how do we know if they are any good....until we are 1/2 way through and then it might be too late to switch if they are terrible. So lean on other real estate investors. If they have worked with a lender then you at least have a starting place. You will want to try a "DSCR" type of loan - basically a loan that is based on the rental income of the property. Visit your local REI groups. There are many groups that meet across the country. Some post here on the Bigger Pockets Marketplace. Many post on meetup.com. Even facebook will have some. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend visiting if one is close to you.
Lender · Charlotte, NC · Member since 2022 · 739 posts · 410 votes
4y
HI @Caden Wakim, any lender would need more information but regardless, there are loan products that would allow you to do it without your dad attached.
If you would like a referral to a lender that can flesh out your financing strategy, feel free to shoot me a message.
Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
4y
Hi Caden, Congrats on your 2 properties! There are some products our there that could work for your scenario. If you PM me some more details (how long you've had the properties, zip code, approx FICO, and your income scenario) I'd be happy to point you in the right direction. -Kristen
wow very impressed youre doing this at 19. good for you! the hard money person i use also does long term lending. his rates and terms and requirements are "low doc" meaning no tax returns etc.. this may be perfect for you. rates are a little higher but itll get you into a long term product
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
4y
@Caden Wakim the short answer here is "yes" you can do this without your father (at least, in theory). I'm assuming you have no job so it would increase your chances of success if the properties were long term rentals. It's not mandatory...but it would increase your chances. The thing I would do is consult the local real estate investors in the area. I appreciate anyone who is trying to do business but how do we know if they are any good....until we are 1/2 way through and then it might be too late to switch if they are terrible. So lean on other real estate investors. If they have worked with a lender then you at least have a starting place. You will want to try a "DSCR" type of loan - basically a loan that is based on the rental income of the property. Visit your local REI groups. There are many groups that meet across the country. Some post here on the Bigger Pockets Marketplace. Many post on meetup.com. Even facebook will have some. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend visiting if one is close to you.
As mentioned, you'll have to go after non-conforming loans. I guess you changed your exit strategy, or your hard money lender didn't ask. Probably next time get a better lender. If I may say, for your next deal get your strategy lined up when you start the deal. Good luck.
Flipper/Rehabber · IL · Member since 2021 · 100 posts · 49 votes
4y
Exit strategy has been the same from start to finish, BRRRR. The refi part was dragging on due to the thought that i had to wait for my dad to get on the loan with me, hence me poking the question.