Seasoning Period Solution- Rate and Term Re-fi?

Question

Hey BP Lenders!

Looking for an outside-of-the-box solution here:

My situation:

I'm in the process of constructing a solution to the 6 month seasoning period for a 30 year note in by BRRRR process. I purchased the property with cash, and I've only owned it two months, so I can't seem to find a 30 year note option.

Which led me to Rate and Term re-fi's. I understand there are no seasoning requirements. The problem is: I don't have a note on the property, so I'm technically not paying off an existing mortgage and therefore ineligible.

My questions:

1) Can I file a note against my own property (with an LLC I own or a family member as the "lender") and therefore be eligible for a Rate and Term re-fi?

2) Are there any legitimacy qualifications for the "lender" being paid off?

Extreme example: What if I have my grandma file a 15-year, owner-finance note with the county? I would immediately be eligible for rate and term re-fi, pay her back, and not wait 6 months.

Shaun Weekes · Answer

Contact @Jerry Padilla as he has had success with rehab costs and purchase price lumped in together.

Brian Garrett · Answer

The way Jerry described is one workaround but your method works as well and is described in detail below:

https://www.biggerpockets.com/...

Jerry Padilla · Answer

@Dakota Adney

For future reference and purchases here is how to make it work. This must be done on closing of the purchase. It is also at the underwriters discretion so not all banks allow this.

As you know; The typical waiting period for a cash out is 6 months.

You can do sooner with delayed financing if you paid cash - with the  restriction of pulling out a max of the purchase price plus closing costs prior to 6 months. Delayed financing you still go according to the current appraised value of the property.

Here is the Catch - on how to make this work!

If you include on your closing statements (which vary state to state - HUD-1/ALTA statement ) the renovation costs - and have them charged at closing...... This renovation cost now becomes an initial closing cost and can be included with the max that you are able to pull out prior to 6 months.

Dakota A. · Answer

@Shaun Weekes I’m looking to get financing for the purchase price + rehab costs. To my knowledge, Delayed Financing would only recover the purchase price.

Shaun Weekes · Answer

You should be able to qualify for delayed financing in which case you can do a cash out refinance.  Contact @Jerry Padilla and he will help you with your situation.

Seasoning Period Solution- Rate and Term Re-fi?

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