I remember hearing delayed financing on a podcast a while back. Has anyone successfully completed a BRRRR with delayed financing instead of waiting for the seasoning period of 6 months (for most banks). I remember hearing something along the lines of including both the Purchase price and Rehab Cost in closing to complete the delayed financing.
My silly question is: Is this possible with a fully paid off (cash) property?
I am seeking capital for an investment property. Due to my 1099 employment, the only opportunities I see for myself is a HELOC or Refinancing (cash-out) of my personal property. Afterward, I'll do a BRRRR, and instead of waiting for seasoning, I can possibly do delayed financing.
Any suggestions would be greatly appreciated.
@Jesus Sosa In order to do delayed financing, you have to purchase the property with cash. I'm doing a deal right now where we're paying cash and plan to close on financing shortly after closing on the property. We are sticking the rehab costs into the closing statement so we can get that back.
@Jesus Sosa as AJ says, it does need to be a cash purchase for delayed financing, and the key is that you have to be able to clearly document that it's YOUR cash. I recently had a DF application fall through since I was applying for a loan in my name but had purchased with funds from my partnership's bank account. I think that a HELOC is fine though - check out this blog post (there's helpful info in the comments too): https://www.biggerpockets.com/...
Also be aware that with DF the amount you can cash out is limited to your total upfront costs OR 75% of ARV (I think it's 70% for 2-4 units), whichever is LOWER. You can add rehab funds to your closing statement so that those get counted in your "total upfront costs." It can be tricky and some lenders won't have much experience with it so it's probably a great idea to call around and ask questions early on. Best of luck!!