Nasir El Ameer: “The Ultimate 30 yr Fixed No Seasoning Refi-Cash Out Guide For Rental Properties” (The Financial Zone)

How to Get A No Seasoning 30 YR Fixed Refi- Cash Out Real Estate Loan For Rental Properties Guide






Does a no seasoning 30 YR Fixed Refi Cash Out loan exist to cash out the ARV value of your rental property without the hassle?

Or is it a fairy tale full of pixy dust that is talked about in investor forums in theory only without any practicality...

Were your left with the same message of, "call the banks""call the banks "....

Only to be told no every freaking time and if you are told yes its a Pain In The A**(PITA) to get done....

Which then leaves you feeling hopeless in the abyss...

And you start to question this whole real estate investing wealth building thing that everyone says is so great...😢

To be frank with you they do exist and a secret group of investors have been getting these types of loans for years!!

Some of these investors are getting 80% LTV cash out loans for 30 yrs fixed for their investment properties & commercial properties all without stepping into a bank...👀

In today's post that secret will be revealed but before I tell you how to do this...

Thy must learn the truth about the banks and why they do not offer 30 YR Fixed No Seasoning Refi Cashout Loans For Rental Properties!!



refi cashout rental property

3 Simple Steps To Refinance-Cashout Rental Properties- Without Seasoning in a -Real Estate LLC



Who Can Use A Refi Cashout Loan

So before we begin on this truth will set you free journey lets do a quick roll call...

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This post is intended for investors who own rental properties, plan to buy more rental properties, BRRR practitioners, multifamily investor, or investors looking to creatively finance their portfolio to scale it over time quickly...

Check out this awesome post about BRRR & BARRR Here & Here

As the investor your ultimate goal in refinancing to cash out is to get the equity out of your deal to pay off the previous loan, put money in your pocket, and to cashflow without money in your deal...

What is Seasoning?

Seasoning is a term used in the real estate lending space to denote how long you have owned a property. Common seasoning requirements by traditional lenders to refinance and cash out the ARV value of your investment property is 6 months. While other banks will require you to be on title for 12 months...

Furthermore if the property is owned in a LLC the seasoning requirements may be a PITA because the bank will want the LLC on title for 2 years with tax returns filed... (Yikes)

On the other hand if your looking to refinance only, then their is no seasoning requirement on title to do so. However, this doesn't help you get that ARV value out of the property so this strategy can kick rocks...



Why does seasoning exist?

Well...

Its an unwritten rule and written rule (delayed financing if its a government sponsored loan) that banks have adopted to keep investors from making to much money to fast..

See banks realized that when real estate markets are hot, investors will make alot of cash... banks will write alot of loans, buyers will get approved and houses will be sold...
and realtors actually get to make money...🤣

However, bankers are bankers they wanted a bigger piece of the pie but yet they wanted to be more conservative because our Uncle Sam & Aunt Fannie told them to do so...

Who Created the seasoning requirement?



As an investor its great feeling finding a deal below market value fixing it up and driving the value up and watching the checking account stack up when you sell...

But the bankers,your Uncle Sam & Aunt Fannie couldn't let you get all that shine to quickly...

Bankers, Uncle Sam, Aunt Fannie, and your cousin Freddie Mac created the seasoning requirement because they preferred an individual to own the property over a period of time to determine its market value,vs an owner improving the property to drive up the value to then sell at the higher value to make a profit...

According to Craig Cobert, "Lenders believe that a home bought much lower than it is being sold for within a 1 year period, is risky collateral for a loan because it requires the buyer to borrow more money for that home than the home could actually be worth." The Investor Nemesis

Your Aunt Fannie House Rules

To add more salt to to the seasoned loan requirement is the delayed financing rule...

See link here :Fannie Seasoning Guidelines

A note from Uncle Sam:

The property must have been purchased (or acquired) by the borrower at least six months prior to the disbursement date of the new mortgage loan...

Bankers Discretion is why you get denied(rejected pic)





On top of Uncle Sam rules are the interpretations used by banks when issuing the loans...

The bank at anytime based on their risk, regulations, and internal guidelines may have even more seasoning on top of the Uncle Sam & Aunt Fannie's requirements...

Its like geez does anyone want to make any money these days....😢

How To Get a Refi Cash Out Loan Fixed For 30 YRS

So here is what you gotta do...

Instead of going to a bank whether its a local bank, commercial, or any traditional bank. Go to a non-bank alternative source of capital...

Why an Alternative Lender

Well an alternative lender is not a bank that is heavily regulated by your Uncle Sam, and they make their own rules as a private entity...

The alternative lender is a commercial lender specializing in commercial real estate transactions for residential non- owner occupied properties ranging from, multifamily, office, retail, etc...

You see the alternative lender is in the business to lend with customizable loan solutions that fit you...

They are not interested in you, opening a checking account, opening a savings account, applying for a credit card, whether you live in their state,open a CD, or constantly up-sell you things that make .05% return on your money...

No wasted time zone...

They truly want to help you refi cash out so you can continue delivering value and make money...

What is an Alternative Lender-

In a nutshell an Alternative lender is a non-bank lender that is either an asset management company or debt fund that finances a variety of real estate transactions...

I know real estate terms are interchangeable and can be confusing... I want to be clear on who we work with as a commercial funding specialist...

People assume alternative lenders are private money lenders from a local investor...

But that is not the alternative lender that will work for this scenario...

On the other hand...

The other connotation for an alternative lender is often a hard money lender... and usually people assume that the alternative lender wants to charge you interest forever and ever, with a boatload of points...

But that is not the lender that will work for this scenario either...

Not to throw any shade on hard money lenders, they are a valuable resource to real estate investing when you know how to use their funds...

They are only useful for short term financing such as fix and flips and ground up construction...

And no, we do not advocate working with a short term loan from a hard money lender for a long term term rental...

No Seasoning Refinance Cash Out Terms

So here is how this thing works...

The Breakdown:

Alternative Lender Terms go a little something like this...

Rental Property is owned by you whether free and clear or with a loan on it (you must have equity in the deal to get cash out)...

We can loan 75% of the ARV starting the day after you purchase the property....

We can also offer 80% LTV on a refi-cash out as well but for this example we will work with the 75% LTV...(See PS section for more info on 80% LTV cash outs)🎁...

For Example: you purchase a rental property on a deal in a decent to good condition for 300k and the property needs minor work around 10k and after that work it will be worth 500k...

Then We can lend you 75% of the ARV of 500k which will be 375k...

Not a bad pay day...

How To Calculate Your Refi Cashout Loan Amount

To get this number for any deal you do in the future simply take the ARV of the property get a calculator and multiply by .75, Should look like this (ARV * .75=) (500,000*.75= 375K)

Other factors that make us cool to use for this type of deal is that we do not require a tenant to currently be in the property when we do the cash out of the ARV... (Banks require this or your loan will be denied)

What we will do is take the local market rents in the area to determine the LTV that we will lend to you... (*Please note, in this instance with no tenant in place we may come down on the LTV if the market rents are lower than the rents you will charge for the property.... Oh almost forgot banks don't do this)

Traditional lenders deny refi cash outs that do not have a tenant in place

But don't worry we have your back and can go over multiple financing scenarios for you to see what makes sense...

Refi Cash Out Options For your Rental Properties...

Option 1

Get a tenant coming into the rental property by having a lease signed and a deposit in the bank...

By having a lease signed up between you and the tenant with a deposit it puts you in the position to get the full LTV of 75% ...

Option 2

Is to have a tenant already in the property to get the full 75% LTV

Furthermore, we do not require tax returns, income docs, or your granchildren's future to get the deal done...

Let's face it, aint nobody got time for all that paperwork...😂



Another cool thing you can take advantage of is that we can close in a LLC, or in your personal name...

An overlooked feature that all of our clients love and you will love to is that we do not report to your personal credit report, therefore keeping your most precious asset clean as a whistle to go get other financing to help run your real estate business and other businesses...

We have no debt to income restriction or amount of financed property restrictions either... 👀

Alternative Lenders Have Flexible Refi Cashout Loan Terms



Our loan terms are very flexible and can be customized by you to fit your needs...

Our loan offerings are based on the principle of no box loans where we assist clients in creating a loan package that suits them vs going to traditional sources only to see that they created a box that focuses on...

abc requirments...

XYZ financials...

But never anything about...

Y.O.U....

it simply doesn't fit...

Customize your 30 YR Fixed Refi Cashout Loan

Our default Loan terms are 30 year loans fully amortizing that can step down on a 5 years basis to 25, 20, 15,10.

You can choose a 30 year fixed rate loan...

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Yes a freaking 30 year fixed rate for the life of 30 years...

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Let me tell ya...

Banks Do Not Offer 30 yrs fixed loans for rental properties

My clients and I have yet to find one bank that offers 30 yrs fixed on a investment property or commercial property for a refi cash out loan with no seasoning requirement at 75% LTV or at 80% LTV...(*excluding GSE loan programs from your Aunt Fannie and Cousin Freddie...)

Another loan option we offer is a 30 year amortizing loan with a 5, 7, or 10 year term option. Which means after 5 or 7 years the loan will convert to an adjustable rate mortgage (ARM) at the libor rate plus a spread at the time of the loan.

This spread usually will fall between a 6-7% spread plus the libor rate after the fixed terms ends. This is very common and standard across the lending spectrum from traditional banks, local banks, and alternative sources of capital.

And the best part about all of the loan options is that you can pick whichever loan you like to fit your investment objective vs being boxed in and only told this is what you can get...

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Refi Cashout Credit Requirements

You need to have a 650 middle score meaning we will literally base it off of the middle score out of three, or average of the three if the scores are all over the place...

We do not pull credit initially to screen the deal as the banks do which causes a hard pull on your credit and a unnecessary inquiry that drops your score and stays there for two years and can affect your ability to get other credit products for other pursuits...

So instead of pulling credit we ask to see a copy of your most recent credit report in pdf format, and we can show you how to do that without it affecting your credit score... 😎

From there we use the pdf report to take it to our underwriting team to price your deal...

If you do not have a 650 middle score all is not lost we will look at other factors to get your deal done and funded if its doable...

Refi Cashout Rates:

The rate is contingent upon you and your deal. Meaning that until I know all of the facts and numbers then the rate is irrelevant. Its about your entire package of the deal, from credit scores, loan amount and loan term, use of funds, and presentation of the deal...

But if you must know rates for this type of loan product at 75% LTV with no seasoning will start at 6.5% (720 credit) at 30 yrs fixed fully amortized. If your under 700 credit and need 75% LTV on a cash out rates will likely start in the 7% range...

Nas that rate seems high...

Maybe it seems high on paper but the terms is what make the deal sweet...

Alternative Refi Cashout Rates Vs. The Bank's Rate



See example below

For a better understanding of how rate adjustments work see this post here:How Rate Adjustments Work

Example:

Bank A offers a 20 year amortization loan at 4.6% with a 5yr fixed term for a 375,000 Cash Out on a free an clear rental property, Adjustable Rate will be based on a 5% max cap.

After year 7 the rate will convert to a max of 9.6%

For this example I have excluded the taxes,insurance, HOA, etc to illustrate the point that a low mortgage rate for a refi cash out is irrelevant and that your overall loan terms are important.

Bank A Mortgage Payment terms:

Initial monthly payment for 5 years: $2,392.73

After 5 years payment jumps to: $3,281.98

A 889.25 increase.



Site source: ARM Calculator

The Alternative option for a Refi Cashout Loan

Terms are 30 years fixed at 6.5% for a refi cash out rental property loan.

Monthly payment for life of loan is 2,370.26.

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Wow..!

Your probably scratching your head right now at how the alternative lender charges a higher rate but the monthly payment is less than the loan from a traditional bank with a lower rate.

The reason this works out this way is because the alternative lender terms are fixed for a 30 yr term at 30 yrs fully amortizing meaning it will be paid off in 30 yrs based on one fixed payment...

The bank only offers a 5 yr fixed term with a 20 yr amortization schedule therefore making the actual term of the loan for the fixed payment rate shorter which makes the payment higher...

5 yr arm loan vs a 30 yr term will have a higher payment due to the term being shorter...

And that's why the rate is irrelevant compared to the other factors of the deal...

I know their are gurus and would be investors, teaching you to get the lowest rate and go to the bank for your deals but the investors that actually make money in this game are looking for the best terms because they know the terms determine the rate and they know the bank will never give it to them...

Refi Cashout Loan Rate at 7%

Even if the terms were offered at 7% the payment will be 2,494.88 fixed for the duration of the loan.

Which still saves you money over the duration of the loan plus a peaceful night's rest because its stable and predictable...

What about Commercial Properties?

You can also do a refi cashout on commercial properties with the same financing terms and can go up to 75% LTV and in some instances 80%.

And when it comes to commercial properties for refi cash out loans your options become even more limited and instead of an adjustable rate mortgage that converts to a higher interest rate they bank may only offer a balloon payment....(Depends on Bank)

Example:

Bank Terms for a Commercial Refi Cashout Loan

Commercial Bank A offers a 25 year amortizing refi cash out loan at 5.5% with a 7yr term balloon due after year 7.

After 7 years the full balance on the loan is due.

For this example no insurance or taxes are included.

Monthly Payment for this loan is: $2,302.83

Balloon due after 7 years is : $315,319.22



Source

Alternative Terms for a Commercial Refi cash out Loan

30 years fixed @7% is: 2,494.88

For this calculation I simply used a 30 yr fixed calculator....

Monthly payment is higher but you don't have to worry about a balloon being due if you still own the property...

And I know what your thinking you would just refinance before the terms ends with an extension...

Well that may be the case but with commercial mortgages banks at their discretion can deny the extension and if they get merged by a bigger bank or feel that they have to much risk on the books they can call the loan due...

Commercial lending is a finicky world and the banks are finicky about commercial properties, investors, and business owners...

When you combine the fact that commercial banks are finicky with refi cashout request your literally adding lighter fluid to a burning furnace..

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That's why 80% of commercial loan request get denied...(Source)

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But you do not have to worry about that when you work with the right source...

Alternative Refi Cashout Terms Win



As you can see the comparisons do not compare,they're night and day. Depending on your objective with the property and strategy an ARM mortgage may make sense if you plan to sell before the term...

But if you don't sell way before the term you may be SOL because banks change their lending requirements as the rates change, or as they see fit because they were told to do so by your Uncle Sam...

All in all do not rely on your ability to get an extension for a refi cashout balloon loan on a commercial property because it may not be available...

The #1 Benefit of the 30 YR Fixed Refi Cashout Loan



In this business operating from a clear state of mind is essential to building wealth, using it and keeping it.

The 30 year fixed refi cash out loan is designed to offer you peace of mind, flexibility, predictability and freedom. Even if you plan to sale the property at some point on a 30 year fixed loan it can be done without hassle...

The other benefit to a 30 YR Fixed Refi Cashout Loan is that it allows you to recapture the new equity in the property tax free to buy more properties or start other investments...

Successful investor Mark Ferguson mentioned how he pocketed over 215k tax free using a refinance cash out loan on a foreclosed rental property that he purchased.... See post here



The 30 YR Fixed Refi Cashout Loan Competition is No Contest

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We are not the bank nor do we compete with the bank, across the board banks have the lowest rates on paper but not the best terms for refi cash out loans for rental or commercial properties.

Also they never close without all the paperwork and hassle to get that low rate...

Secondly, non-commercial banks do not close in a LLC therefore leaving you exposed to the uppercut of a nasty liability lawsuit when you decide to put the property in your personal name...

So much for the low rate...😒

Yea its the ultimate bait and switch and your going have to fight to get out alive with a decent loan...

Commercial Refi Cashout Loans with Local Banks

On the other hand a commercial bank or local bank may work for you, and they may even offer no income verification loans... but the problem with them is that you have to find them in your local area, and you may have to be local resident to work with them...

Furthermore, You will spend a significant amount of time calling, interviewing and setting up meetings with a loan officer to see if they are a fit for you...

You also have to talk to the right loan officer who understands your deal and what you are trying to do and they must be able to close your deal, often times the loan officer is not the one closing your deal they send it to a loan committee to get approved...

Which can take a significant amount of time...

Refi Cashout Loans Annual Inspection



Oh I almost forgot...

You may have to meet their annual reporting requirements for their loan...

Their annual reporting requirements may be that you submit documentation to them about your properties financial statements, personal statements, and rent roll yearly as well as subject yourself to hard pulls on your credit report in some instances...

Basically they have a annual inspection to make sure you know what you are doing with the money they gave you already...

On top of that you may have to have an active checking or savings account with a minimum opening balance or average balance just to do business with them...

The 30 YR Fixed Refi Cashout No Seasoning Loan is not offered by banks!!!



Even though banks play a vital role in our society and a fundamental piece in real estate investing for some transactions they still do not offer 30 years fixed... they usually will go to to 25 years with a term option. Very rarely fixed for 30 years...

Lets not forget they are a bank... they can at anytime change their internal lending guidelines on their portfolio if their own internal regulators believe they are over leveraged. Or if they get bought out by another bank who despise all refinance- cash out loans...

Then they simply will refuse to offer it anymore...

At that point your SOL...

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Remember that ole saying time is money...

How much time are your spending away looking for money?...

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In the end it could be worth it if you can find a local bank in your area that truly understands you and your deals...if you find one keep them and create a relationship with them for the long term...

While on the other hand it can be a stressful drawn out time wasting process that leaves you in the same position as you started...

But now You Have NAS (No Average Stuff) now so you can make more money and close more deals...

Refi Cashout Loan Property Qualifications

Property Types Considered:

Mi casa is Su Casa...

Single Family Residences
Duplex
Triplex
FourPlex
Airbnb properties are good to go

Multifamily over 5units

Office

Mixed Use

Retail

Other commercial property types(too many to list...🤣)

Refi Cashout Loan Amounts:

Up to 5 million:700 min middle Score Needed

Over 2 million- 700 min middle Credit Score Needed

Under 2 million- 650 middle Credit Score Needed

Minimum loan amount- 100k

Refi Cashout Loan Requirements

Own you primary residence must be current on mortgage or no late pays in last 4 years... (If you have lates This can be bypassed with a good story)

Deferred maintenance must be completed before the refi-cash out loan is approved...

Appraisal must be ordered by us to determine property value...

The Start to End Process of getting a Refi Cashout Approved!



So here is how this all works from beginning to end:

You reach out to me and say Nas I got a deal that I would like to refinance and cash out...

I say awesome since we have no seasoning requirements on title today is your lucky day ...

so here is what you need to do...

We will answer some questions about the deal to better understand your goals and objectives to pre-qualify you...

The pre-qualification process is basically taking the value of the property that you present to us plus your credit scores that you send to us in PDF format and my underwriting team doing some internal comp work and screening to get you a quote that same day if everything makes sense for us...

You do not have to worry about a loan committee decision that will take weeks we usually get a soft approval in (24-48hours or same day) followed by an LOI once we receive the documentation we need for your deal...

Its a really quick process and its fun...

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And you do not have to worry about an upfront fee for the 75% LTV Refi Cashout loan for rental properties...

After the docs are received and screened

We issue a letter of intent with a term sheet...

After that is issued and signed

We order the appraisal for you from an independent appraiser...

After the appraisal comes back with the values and everything checks out

We go to closing,

We open escrow,

And Image result for boom gif

The deal gets closed and funds will be in your hands as easy as 123...

The process from start to finish and with a cooperative spirit will take between 14-21 days...

Conclusion: Obtaining a Refi Cash Out Loan for your Rental Property is Easy...



Getting a loan to refinance and cash out the ARV value of your property without seasoning is not a fairy tale it does exist and its no longer a secret now since I told you how it works and where to get this type of loan.

As commercial mortgage specialist we do this all the time for our clients and new investors. The 30 YR Fixed No Seasoning Refi Cashout Loan for rental properties is very flexible for your portfolio to re-position equity, create predictability, flexibility, freedom, acquire new properties, create working capital, expand into new businesses, consolidate debt, and scale your portfolio very efficiently.

We are not the bank and we do not compete with the bank but we do close quickly without all the hassle, income docs, and without the restrictions that you will find at a traditional bank.

You can buy a property today and get refinanced and cashed out tomorrow...

The private sources of capital that we work with are relationships with a variety of financial resources, from institutional to private asset funds, private partnerships, and institutional lines of credit, asset managers, and debt funds designed to lend where the banks can't.

These relationships that we have built over the years allows us to do some very cool things for our clients in a streamlined fashion to help them make money and creatively finance their deals...

Their's this old saying you don't know what you don't know...

and its about who you know...

Well we are here to help with you with both...

Final Steps

If this something you need to do now or anytime in the future reach out to me in the contact section or fill in the form in the side bar...

My team would be delighted to discuss your options...

PS.: If you are constantly being denied for your refi-cash out loan its not your fault you just have been going in the wrong place to get the deal done. I created this cool quick video to show you how to do this fast even if you got denied at the bank. Plus how you can actually get 80% LTV for your cash out... Just click the link to watch the video Here

Question For You:

What are you currently doing to refi cash out your equity in your deals?

Leave a comment below let us know your game-plan? 👍

Also feel free to share this with your friends, investors, and colleagues. 🙌