BRRRR, "Not so fast" cash out refinance
1 Reply
David Warner
Real Estate Agent from Troy, IL
posted about 1 month ago
Closing on a SFR BRRRR next week and coming to some realizations not previously considered. This is definitely a rookie learning experience in which I will be taking detailed notes. Lender says that the commercial loan product I am using will convert from interest only to P&I at the end of rehab and there really is no cashout refi option for at least a year? She says I COULD quit claim from the LLC to my name and back and do a 30 yr in the process but the cashout would hit my credit like income? The house appraised much better than anticipated so on a 75/25 cashout refi I would be able to cover purchase and expenses and walk away with a nice bit of money to pump back into marketing etc. Thinking that I may have to wait on the refi and cashout has me rethinking my strategy and also everything I thought about BRRRR. My strategy is long term buy and hold but with the appraisal we received it only makes sense to take equity now if possible. Advice greatly appreciated.
Joseph Crunkilton
Rental Property Investor from Tualatin, OR
replied about 1 month ago
Try some other lenders. If you're the sole proprietor in the LLC then a quit claim transfer, conventional mortgage is an option. There are some lenders who have long term products for LLC's. I am working on a deal similar to yours with my LLC.
It's a bit grey and there's no really wrong answers. I'd keep trying small banks/lenders until you find terms favorable to your situation.