How do I dummy proof my cashout rehab?

[Ramiro Rodriguez]

I am Currently under contract for my first BRRRR deal. I used a cash out REFI to purchase the deal but that will leave me with little to no rehab budget. Im curious to see what your thoughts are as far as obtaining financing for the rehab.

My goal is to at least cash out refinance out my rehab budget, Get some tenants in there and quickly pay down the remainder of the loan and cash out refi once more for another project.

What are some techniques I can use to make sure I can pull out my rehab budget when i refinance this property at its new value? 

Will having a larger DTI (cash out & Rehab loan) affect my ability to get a cash out refi loan?

The last thing i want is to get denied for a cash out refi and be stuck with a high interest rehab loan. 

Thank you for your input!

-Ram

[Jack Mawer]

I agree with Tarik on this one - if you are concerned with DTI, I would look into a DSCR loan as DTI will not be an issue/necessary to qualify. In addition, there are some DSCR lenders out there who can finance your fix/flip loan as well and then look into the refinance with you. If you have already purchased the property with cash, speaking with lenders about delayed financing or looking for private money to fund the rehab might be your best bet. Best of luck.