sub2/refinance - Posted by Gerald-DC

Posted by David Krulac on February 18, 2002 at 19:15:46:

some lenders will only refi after a year’s seasoning, other lenders will not refi with cash out. either of those lenders will not fit your plan. check it out now to ensure that when you want to refi there will be a lender available that fits your plan.

David Krulac

sub2/refinance - Posted by Gerald-DC

Posted by Gerald-DC on February 18, 2002 at 18:55:51:

I have a seller who has a property that is rented on a month to month and is receiving a positive cash flow of $300.00 per month from a Section 8 tenant. The seller has a note of 64K and the FMV of the property is 90K.

The seller has four other properties and he is trying to sell all of them. He is a tired landlord and if this deal makes sense, I can probally acquire his entire portfolio using the same formula for each of the remaining houses.

The deal that we have agreed on pending inspection of the property is for for a sales price of 69K with 5K to the seller in cash, and I would take ownership of the prop sub2 the existing loan in the amount of 64K.

My plan is to continue to rent out the property for another six months, then refinance and get my 5K back plus another 20K in equity out tax free and then keep the property for my rental portfolio or sell it retail or owner financing.

Any thoughts, cautions, suggestions or comments will be appreciated.

Think again - Posted by Bud Branstetter

Posted by Bud Branstetter on February 18, 2002 at 21:48:55:

From what you said the FMV is 90K and underlying mortgage will be 64K. Now, unless things have changed drasticly since lunch you can refi at 70% LTV for 7.5%, at 80% ltv that goes to about 9% and at 90% something on the order of 10%+. Along with that figure on 3-4K in fees and costs to do any refi. If it were as easy as you hoped I’d be talking to Ed Garcia all the time.

Re: sub2/refinance - Posted by JohnBoy

Posted by JohnBoy on February 18, 2002 at 21:47:25:

Also, most lenders that will allow cash out on a non-owner occ property will only refinance up to 80% LTV.

So if it appraises for $90k you would be able to get $72k which would get your $5k back leaving $3k towards closing costs which might leave you with a little extra left over.