Q & A Saturday – Can I Cash Out Refinance My Rental?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “Can I Cash Out Refinance My Rental?

 Buying a House with Cash - Doing a Cash Out Refinance on a Rental Property

In this video Shaun some of the requirements usually needed if you want to do a cash out refinance of a rental property.


Some of the main points covered in this video are:

1)      The typical seasoning requirements

2)      Commercial vs. Residential loans

3)      What if I own it in my businesses name?

4)      Oh by the way you still have to do all the typical stuff to qualify for the loan as well!


A strategy many investors hope to use when building a rental portfolio is to refinance properties to get more cash to help purchase more properties.  In the past this was an easier proposition than it generally is these days.  While these loans can be done there are many restrictions on them, in the most common places to get them, which makes it difficult.

If you are getting a typical non-owner occupied residential loan (these are your 30 year fixed rate ones with good rates) you generally have to own the property in your personal name and cannot have more than 5 mortgages in your name already.  Beyond that you have a seasoning requirement that means you have to own the property for more than 6 months to be eligible, and many banks want closer to 12.  Even at that they will often only give you around 70% of your purchase price for that kind of loan.  That might be fine unless you bought something at a good price because it needed work and you spent a lot of the repairs.

For example you buy a house for $100K cash then put $50K in to it to get it in great shape and it then appraises for $200K.  In this case you would hope to get 70% (or more!) of that appraised value so you can get most of your capital our, and still have a lot of equity.  However often at the 6 month mark you might only get 70% of the initial $100K which means you have $80K still tied up in the property.  The issue there is if the exact same deal presented itself again the investor now needs to find an additional $80K beyond what they started with to be able to do it.


Do you want to sell a rental house with equity?  Do you need to sell a house in Massachusetts or New Hampshire and can’t get the money out of it you need?  If you would like to sell your home fast and hassle free schedule a consultation with us today.


Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.


Some useful resources:

–          Fannie Mae Cash Out Refinance requirements.

–           Freddie Mac Cash Out Refinance requirements.

–          Our Video on How Many Mortgages you can have.

–          Our Video on the Costs to Rehab a House.

–          If you want to sell a house in Massachusetts or in New Hampshire we can help.





(Image credit: Buying A House Cash via 702homebuyers.com)


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