All Forum Posts by: Jerry Padilla

@Ryan Matthes 

Exactly! I would just recommend paying off the debt that you accrued with the 20k in improvements.

@Ryan Matthes

Maybe a home improvement loan or personal loan to get in up and running. Then do a cash out refinance to pull the equity out, pay back the loan and have funds for the next purchase. A cash out refinance requires an LTV of 75% for a SFR investment property.

@Derek Ferguson

That will be decent enough equity to consider cashing out. You could start the process of cashing out prior to 6 months and close right after the 6 month mark. 

@Paris Williford

That is true, you will not be able to use your father with a 203k. 

Cashing out will all depend on purchase price and appraisal. With an FHA 203k you have very little equity in the property. To cash out refinance with conventional on a MFR you would have to have at least a 70% LTV. With FHA you start out with an LTV of 96.5% including renovations.

@Delvon A Byrd

What do you mean by is it ok?

Most people get mortgages on properties they purchase and leverage their money so they can purchase more. 

With conventional financing, you will still have skin in the game. A SFR requires 15-20% down and a MFR requires 25% down for an investment property.

Let me know if you have questions on financing. 

@Shaun Weekes

Does commercial financing as well!

@Derek Ferguson

What will the value be after the renovations? 

At 6 months from closing, you can cash out refinance at 75% LTV of the appraised value.

@Ray Thorsen

You can always start the process of a cash out refinance and use that to pay back the source of funds that you use to purchase the property. 

Some idea's are - personal line of credit, business line of credit, personal loan, HELOC on your primary.

@Rodney Buford

Are you looking to cash out refinance? Or just refinance out of the hard money lien on the property?

This makes a difference with the LTV. I think we all assume a cash out refinance after 6 months to recoup all or most of your investment. A cash out refinance on a duplex will allow up to 70% LTV.

If there is no cash out, for an investment property duplex, there are no seasoning requirements and an LTV of 75%.

I agree with everyone that is important to find a loan officer that works with investors and knows investor guidelines well!

@Shaun Weekes Thank you for the mention! 

@Vincent Dang

What are you looking to accomplish? 

Are you putting the properties in your personal name? Are these but and hold properties?