Posted by Ben Carmona on April 11, 2007 at 23:03:28:
You cannot compare this “now” 4 unit building to the single family listed at $215,000. It will be important for you to look at comparable properties that have sold in the last 6 months within a ~ 1 mile radius.
If you’re having problems finding 4 unit properties within these parameters then you may be looking at a unique property for the area. The conventional lenders who will do the refinance will allow the appraiser to go a little outside of the guidelines with a solid explenation.
As far as when you can refinance, that can happen any time. If you’re looking to do a cash out refinance, then you may run into seasoning issues but there are a couple lenders that can do it. This is pending upon approval of your credit, employment history, income, and assets.
You mentioned about the possability of rehabbing and flipping. What’s the current condition of the property? Since there are tenants, it must be habitable, which is important for the conventional lenders. Was there work that you know must be done though?
A hard money loan could be possible with such a low ltv. You could even get rehab funds included with the hard money loan. However, I think there may be better options depending upon your financial situation.
To secure the purchase, I’d first talk to local banks within the area where the property is. You’ll want to speak to the commercial loan office who handles short term rehab loans. They may even do the refi too.
In addition to this, you could use one of the few remaining conventional lenders who offers 100% financing. For stated income loans you’ll need a 720 score and the rate will be in the 10s. Not a big deal though if you plan to turn right around and refinance based upon the true lower ltv.
If you need help walking through these options let me know.