Hello All! I’ve been lurking on this wonderful forum for a while. Now I finally have a question.
Can anyone direct me to a lender/HML that can do the following:
I have a 4 unit multi-family building that I want to do a cash-out refi on. I need someone that can do this with no seasoning on the NEW appraised value of the building. I’ve increased the value via capital improvements + raised rents.
I’m in Pittsburgh, PA. Credit score of 700+. Experienced investor.
Not knowing your vital details like the current loan to value, debt servicing ratio or your personal debt to income ratio it hard for me to advise you. The only thing I know for certain is your short on cash. If you need short term cash you can either use your 700 FICO to get some credit card to fund your cash shortage or get a hard money loan if you have 25 to 35% equity in your property.
Using my crystal ball I suggest you sell the property and recaptured your initial investment plus profits then rolled that money into your next rehab. This will make you financial stronger for your next deal.
You can make money in this business if you have no money and bad credit. You can make a lot more money in this business if you have good credit, asset reserves and some cash reserves to put into the deal simple because you will be able to take advantage of better opportunities and your loans will cost a lot less.
Below is a rehab loan program that is available that doesn’t require you to have your own money in the deal but you must have decent credit and asset reserves.
Let me provide some more info. The property is in my cousin’s name, he’s my business partner. An investor gave him $60k cash to buy the property (aka there is no mortgage on it) We have put about $15k in to it as fixup/rehab. Estimate new appraised value at $130k using Income Approach.
It’s a residential 4 unit. Two HUGE 1 bedroom units and Two HUGE 3 bedroom units. Gross Rent will be $27k/year. Utilities are separated.
His credit is 750+. I don’t know his debt to income off hand. He has cash reserves and holds equity in several of our properties.
We don’t “need” cash in the sense that we are in any type of crunch. We just want to cash this out and roll it into another property(ies). Prior to the mortgage industry collapse we had no trouble doing this without seasoning. Now we can’t find conventional lenders that will do it without seasoning.
There are still conventional lenders doing no seasoning cash out refinances. LTVs depend on # of properties owned, doc type, etc…
There are still a few AltA lenders doing this too.
A couple lenders also have a great program for those that are buying the property for cash and want to refinance immediately after purchase. They can treat this as a regular refinance then which has no seasoning for value.
As brokers, we take down the 1003 application information and then enter this into the lender’s AUS. From there, we can import the original credit report used and the lender’s site will underwrite the file.