OfflineI have no income at the moment. I will be training to become a real estate agent within the next month but probably won't close my first deal for at least a few months after that, so I'm told. I only have enough cash to cover my expenses during the few months that I won't be making any money.
When I find a good deal on a property that could be used as a rental, it is possible for me to pay cash for it using a private money lender. My lender needs to be repaid within 60 days. In order to do this, I would need to refinance the property to pull the cash out, plus extra for interest, which is no problem if it's a good deal, and good deals are the only kind I work with. I would have tenants in the property with signed leases within the 60 day period as long as everything goes according to plan.
My question is, will any banks refinance a property if I show current leases but don't have any income other than what's coming in from the property?
REALTOR
Real Estate One
Grand Rapids, MI
Hi, M5Mason!
Your refinance would be based upon the improvements (rehab) made to a given property. A rehab typically takes 6-8 weeks. Hard money lenders will finance 65-75% of the ARV for 3months, + points, high interest (15%+/-) and in 3 draws, (property inspection & appraisal included) for buy/fix/resell(flip). Once an appraisal is performed post-rehab, your improvements will prove equity, and therefore, warrant a mortgage. Of course, the interest rate will vary based upon credit status. As a rental property, the renter will provide monthly mortgage payment (and hopefully cash flow). If you're flipping the house, you sell for a profit at retail, pay back your loan, and you have money in your pocket!
---Wait...you have access to the MLS AND you HAVE a private money lender?! CA$H???---Go for it!!!
What are waiting for? LOL
PS. Be sure to hire a savvy remodeler with timely turnaround!
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
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No, a bank will not usually refi a property if you have no other income.
Karen
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Thank you both for the input.
REALTOR
Real Estate One
Grand Rapids, MI
I have purchased my out of state properties with PM, and then refinanced them, but the banks have always asked me for copies of my paychecks to show income; also, you have to make sure you buy them low enough to include the cost of your rehab, if you want to take out 100% of your invested money, because banks will have properties appraised and loan you up to 80% of appraised value.
What you can do is partner with someone who can finance the properties, flip them, and build your own cash to purchase your buy and hold properties... or, there's always wholesaling
Wishing you success,
Valerie
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