All Forum Posts by: Dan Turkel

@Ian Kisbert

This post will answer a lot of your questions and he’ll you better understand the best way to pull it off

https://www.biggerpockets.com/forums/48/topics/460294-how-to-cash-out-1-4-unit-property

@Andrew Postell After doing some more research, it seems like 85% LTV is pretty uncommon. Curious to hear your opinion on which would make more sense. I have a feeling it will come down to which I personally value more - a lower monthly payment or more cash to pull out...

@Andrew Postell

I assume you're referring to delayed financing? Either way, it does look like I'll need to go with commercial financing like you mentioned. I have two portfolio lenders right now that are telling me I can get around 4% fixed for a few years and then it'll be adjustable. One will do 80% LTV and the other will do 85% LTV. Is a higher LTV typically better for us as investors? Which would you go with?

@Andrew Postell

Andrew, I’m actually familiar with your post and I think it’s super helpful. I’ve shown it to several of my friends. I really appreciate you pointing me towards it now - thank you! Unfortunately, I came across it AFTER I purchased this first investment property. I fully intend to use the third strategy you outline in that post for my second deal.

With my current situation, I purchased the property with all cash from my own personal checking account so your third strategy is unfortunately not an option for me. The renovations should be complete by early next week so I’ll need to begin the refi then as well since I already have another potential deal lined up and will need the cash back asap to put into the next one. Given the timeframe, it seems like I’m left with no choice but to go with a commercial loan. Would you agree?

@Andrew Postell

Yes, I did

@Sean Julian what type of rate and terms did you end up getting? Was there a seasoning period?

I'm finishing up renovations on a property I've owned for a little over a month that I intend to BRRRR. I'll be all in around 77% ARV. As I look to refinance it, I'm debating on which option will make the most sense.

1. I go with a commercial lender with an adjustable rate mortgage locked in at 4% for the first 5 years. My local portfolio lender will do 80% LTV and it'll take about a month to do the refi. They have no seasoning period.

2. I wait 5 months (because of the 6 month seasoning period) and go with a conventional loan at that point in time. I'd be able to do 75% LTV around 3% interest 30 year fixed.

I'd really rather go with option 2 because of the lower interest rate. Now is the time to lock in rates because of their historic lows. The conventional loan would cost significantly less in interest each month. But by going with a conventional loan, I'd also be locking my money up in this property for another 5 months. I won't be able to take advantage of the velocity of money that David Greene talks about in the BRRRR book. This would also limit me to doing a max of 2 BRRRR's per year which seems to really take the power out of the BRRRR strategy.

As I continue to weigh these pros and cons, I’d love to hear your thoughts on this. Which option would you go with?

I'm going to close next week on a property I'm planning to BRRRR. It's currently a 3/1.5 in a neighborhood full of the same 3/1.5 houses. As you enter the house, you first walk into a living room. I'm considering building a wall in this room with French doors in it and adding a closet to make it a 4th bedroom. This way, it can still be used as a living area if tenants choose to do so but it will also count as a bedroom. I'd imagine having a 4th bedroom can bring in a higher appraisal and rent. Do you think this is worthwhile?

@Rich Ramjatan

Do you mind sharing which lender you know of that doesn’t have the seasoning requirement?

I'm about to close on a property I intend to BRRRR. When it comes time to refinance, I'd like to use a residential loan rather than a commercial loan to take advantage of the lower interest rates and longer terms typically available. However, if I do a cash out refi on a non owner occupied property with a residential loan, I know most lenders require a 6 month seasoning period before I can refi. My renovations should only take a month or so and ideally like to refi shortly after they're complete once I get a tenant in the property. So my question is this - have you ever heard of anyone using a residential loan/lender that did not have a seasoning period?