How to BRRR with shortest seasoning period

Question

I'm working on a BRRR project in Longmont Colorado. I'm running into an issue with the refinance. Seems like I have two options. 1) Refinance quicker withing 3 - 4 months of initial closing and get a refinance at 75% of the purchase price plus rehab costs or 2) Wait the 1 year seasoning period and get a refinance based on appraised value.

Purchase Price 365k, Rehab costs 40k, ARV 435k

With option 1 my sweat equity counts for nothing along with my ability to negotiate a below-market deal as I did not take any commission on the purchase but I get the cashout and lock in an excellent rate for an investment property at sub 4%.

How are other investors getting ARV based on an appraised value and getting around a 12 month seasoning period? Is this something lenders have changes since COVID-19. My last refinance was based on appraised value after 6 months purchase but I did little rehab.

Account Closed · Answer

Find a different lender man. You should be able to do soon. I would shop around.

Ian I Leinwand · Answer

I typically work with 1st Bank with their portfolio loans. I will shop around to see who will do a cash-out refinance without the seasoning period and give me 75% of appraised value. Basically 1st bank is calculating ARV as purchase price plus the cost of remodel. One challenge is I'm recently self-employed and don't have a 2-year self-employment track record but my credit and cash flow are very good.

James Beckman · Answer

Chiming in here since I live in Longmont and I'm curious what input others may have.  How many banks/lenders have you talked with?