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ForumsArrowBRRRR - Buy, Rehab, Rent, Refinance, RepeatArrowBRRRR, "Not so fast" cash out refinance
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BRRRR, "Not so fast" cash out refinance

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  • Posts 5
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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.

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Single Family and Taxes & Accounting
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Joseph Crunkilton
Rental Property Investor from Tualatin, OR

replied about 1 month ago

@David Warner

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. 

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