Delayed financing based of appraisal rather than purchase price
Hey everyone,
Has anyone here completed a delayed financing deal on a property with little to no rehab?
We’re looking at a property we could potentially purchase(Cash+Private money loan) at a significant discount compared to comps. My main question is: with delayed financing, is it realistic for the appraisal to come in well above the purchase price?
For example:
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Purchase price: $100K
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Comps suggest: ~$150K
Has anyone been able to get an appraisal at the higher comp value (e.g., $150K) and then secure a DSCR loan based on that figure - without doing rehab work?
Would love to hear about any real experiences with this, especially in the Indianapolis market.
Thanks!
Leor
Most Popular Reply
You're mixing up two different products. Delayed financing functions like a cashout refi but is technically a purchase loan. It will be based on the original purchase terms, and there cannot be any liens/funding on the original purchase. It must be a cash purchase. You will have to use the lower of the purchase price or the appraisal as the basis for the loan LTV.
Obtaining a new loan after purchase based on the new appraised amount (not the purchase amount) and having used a private loan to complete the initial purchase would be a cashout refi. You would need 3-6 months on title in most cases.