Cash out at refinance - Posted by Jamaul Jones
Posted by Jamaul Jones on December 06, 1998 at 24:14:36:
I sent a letter to the owner of a home that had been tagged as a dangerous building by the city. The owner called me and said that he was interested in selling. The owner wanted to receive $5000. He had to split it with his ex-wife.
The home has a private first mortgage for $12,000 which hasn’t been paid since April 1998. $9000.00 in back property taxes. $1000 in fees for city utilities.
This would be a total of $27,000 for a house worth $60,000 after the $12,000 in repairs.
I was able to contact the mortgage holder, who was an elderely person who didn’t have the money to foreclose and fix up the property. After explaining the condition of the house, I offered the mortgage holder $5000. The mortgage holder said yes to this amount.
I told the seller I could only pay him $3000 and he said yes.
Now I am purchasing a $60,000 house for $18,000.
The house needs $12,000 in repairs. I am financing the deal with a California bank. I am having to put up a total of $5000 of my own money. This includes down payment and points/closing costs. The bank is financing the remaining acquisition costs and repair costs. The loan is interest only 11% due in one year.
I am able to rent the house for $650 per month. I am scheduled to close in about a week.
My question: After the house is fixed up, I want to refinance it with a convention 30 year loan. I want to pull out as much cash on the refi as I can. How long do I have to wait to refi the house? What is the maximum LTV I will be able to pull out in cash.