Pulling Cash Out of Deal

There are numerous properties in the Houston, Texas area that are selling at least 50 % below value.

Is there any financiing method in which I could purchase a property that is worth 110,000 for 47,000 do 10,000 in repairs and clear 12,000 to make interest payments while the proerty sells are unitl it is rented?

Bacially 57,000 needed for the house and 12,000 additional .

find a lender who will go 100% and escrow for repairs. fix it up. sell or refinance at market value.

These can be done all day long.

STEP 1 - Buy at 50% ARV - generally on private money or HML.

STEP 2 - Do rehab.

STEP 3 - Refinance. Although some will say to refinance to 100% I would not suggest that in today’s market. It is also tough to do right now. Better yet, refinance at 75%-80% with standard non-ownwer occupied financing. Pocket Cash.

STEP 4 - Rent home out for long term cash flow and appreciation.


$47k Purchase
$15k rehab, mortgage and holding costs.
$62k total invested

$110k ARV
$77refi loan (70%@30 years@8%)
$15k cash out (NOT TAXABLE!!!)

This would be a bit thin in my book. The mortgage in this situation would run $565 P&I so you would have to get enough rent to make that work. It also would depend on if you have a friendly enough lender to give you terms like that, but it is quite possible.

Have you considered a HELOC? The money will be there if you need it, the fees are low, and you can go liquid easy and fast. You still realize your profit when you sell and you dont have to go 100% to cover carrying cost and rehab.

Those numbers look great. But a couple problems come to mind:

Seasoning to use appraised value rather than acquisition cost on an IP.

Full Doc or Stated Income on a IP at 80% might be higher than 8%.

-As a broker those 2 things about this scenario stand out first.

Do your homework and make sure you have a lender or broker who will do that deal for you before you buy with that plan.

There are no seasoning cash-out loans all over the place. Rates are well below 8% even on a stated or no ratio as long as you have the credit for it.

What kind of scores are needed to get these loans? What are the other requirements?

Depends on the lender but at least a 680 for stated. Six months PITI for reserves. Stated may require landlord experience of two years. Eac h situation is different. There are still plenty of good investor programs out there.

Are there lenders that will do full doc 80-85% with 630 fico @ 8%-9% ?


If you are going full doc then 8-9% is pretty high. Mid to high 7’s is what you should expect.

If you are going full doc then 8-9% is pretty high. Mid to high 7's is what you should expect.

This is probably true. However, without knowing all of the parameters it is a little difficult for any of us to make a truly educated decision. Quoting a rate at this point is truly a guesstimate.

I would suggest that you check with a few different people. DO NOT let every one of them pull your credit. It sounds like you may have already had the opportunity to review it. Inform them of any and all issues that you may have. With a 630 there is something that is either occcuring or has occured. This is what will correlate into a rate and program.

Good Luck!!

Christopher W

What lenders do you know who are still offering these no seasoning loans going SIVA on non owner properties?

Seems like that list has dried up a bit, any info you could please share?

Thanks a ton!

You’ll probably need to contact a broker directly as most of the lenders only deal wholesale.