I am new to this and am currently trying to trackdown information. I have looked through the site and have not found a thread related to this yet if there is one please point me in the right direction otherwise…
I have a property with 60% LTV and terrible credit it is a 36 unit apartment complex with ~70% occupancy. Does it make sense to apply for an HML then refi the HML for a higher LTV to get cash out and get rid of the super high rate of the HML?
I ask this because I have heard and experienced in very small projects that is always easier to Refi a property than to get the first loan.
My experience is mostly in 1-4 unit properties. So I cant answer as to your apartment building.
As far 1-4 unit refinancing, if your looking to take cash out and you have a score of less than 620, you’ll typically have to wait till you’ve been on title 6-12 months. If you’re only wanting to payoff the existing HML then there are lender who can use the new value with no seasoning.
If your score is over 620 then you should have no problem finding cash out refinances based upon the new value immediately after purchasing or rehabbing.
60% LTV, 70% occupancy, and a 620 credit score seem like reasonable parameter for receiving a HML. In terms of refinancing and cashing out with another HML, it is not that difficult, but most lenders do not like “switching hats”.
If your credit is sub 500 you will need to go with a hml. If youre above 560 you may have a shot with traditional banks but the rate will be high, but still lower than hml.