BRRRR deal advice using hard money
Hello everyone, I'm a new investor based out of Puyallup WA. I would like to see if I can get some advice on a BRRRR deal I will be closing on soon. Here are the numbers:
Purchase price: $350k
Rehab cost (2009 build, 1300 sq ft, cosmetic rehab only): $20k
HM lender costs (points and interest, holding 1-2 months): Roughly $10k
Refinance costs: roughly $10k
Total cost: $390k.
ARV: $430k - $450k.
So my 2 exit strategies are either flip with a profit of $50k-$70k, or refi into a rental. Already have an investor friendly lender that can do 75% and 80% LTV (with slightly higher rate).
My mortgage lender said I can only refi and pay off the HM loan itself but I cannot get my 10% HM down payment out because thats considered a cash out and you have to wait 6 months to pull cash out plus a $4k refi cost again. Even if at 75-80% LTV, I can pay off the hard money AND pull out my down payment, its not allowed.
So my questions are, how do the numbers look and did i miss anything?
At 80% LTV I can pay the HM loan completely and just be in with my 10% HM down payment.
Is this what everyone does with their hard money BRRRR deals? Leave their HM down payment in the deal and refi a second time later on to recoup their HM down payment?
Thanks! And if anyone needs recommendation in WA for hard money lender, investor friendly mortgage lender, or real estate agent, I can provide.