I had question regarding refi on a property I am looking to purchase. I am purchasing the house for $105,000 and it appraises for $140,000. I am putting 10% down on the purchase. I will rent the property out for $1250/mth. Now, I want to continue purchasing properties, but I want to leverage this investment by doing an 80%LTV cash out refi in order to keep using that money for down payments on next investment property. If I do this I will get back the money I am putting down on this loan…right??? Then is it possible to keep doing this process in order to keep aquiring properties??? How long do I have to wait to refi on an investment property???
Thanks in advance for your advice!! :smile
Yes this is possible as long as your credit is good, but with the closing costs on the refi your not getting out much more than you put into it but then again its a good way to keep reusing the money for a new downpayment as you say. At 80% going full doc and with good credit you can get some fairly good rates and with no seasoning.
OK, I have good credit and going full doc is no problem. Now I have seen/heard my lenders offering no closing cost refi’s…does this apply to investment properties too.
Its all a give and take, if there’s no closing costs then there jackin the rate up to make up the difference.
If the property still cash flows you may even want to consider a 90% cash out no seasoning refinance.
Like Zach said, 80% gives you very little back above your initial 10%.
Most lenders that do no closing cost options have minimum loan amount requirements for that program. Something in the $120k range probably wouldn’t work for a no closing cost option, more like a low closing cost option.