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Lenders...I need some education on a cash out refi of my triplex please!

2,515 Views | 12 Replies | Last: 4 yr ago by Deats99
mwp02ag
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Howdy guys, SteveBott you may remember trying to help me get this home out of hard money in 2017, well here's my deal. Our home is under contract, closes a week from today. We will net enough to pay off all our consumer debt and have some cash left over. A unit in our triplex became vacant two months ago so we moved into it three weeks ago after consulting the local lender about a refi as our primary. They currently have it in a 7 yr ARM at 6.2% and up until an hour ago they were sure we would be able to refi it at 75% LTV, 5.5% 30 year fixed. Well now they can't find anyone to fund the loan as a 30 year, but will keep it in their portfolio at 80% LTV, 4.75% 7 year ARM.

Is it impossible to do a cash out refi of an owner occupied small multifamily?

SteveBott
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Let me check on this
Jay@AgsReward.com
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AG
Getting a cash out in Texas on a property that combines primary residence and rental property is tough. Fannie Mae only buys single family cash outs in Texas. So, because of that you really only have "portfolio" options as you are being offered. The loan you were likely quoted on the 30 year fixed was a Fannie Mae conventional loan.
cisgenderedAggie
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mwp02ag
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Thanks Jay. I was really hoping for that long term debt dammit. I assume it has to do with some state law? Seems ridiculous.

As a note, even in the new ARM our monthly payment goes down about $50/month and we can cash out close to 6 figures for more deals. That means we have all the cash out of pocket back in hand and are now into the infinite return!

We're thinking we will try the AirBNB game with the two units above. One becomes vacant 6/1 giving us some time to try it out before the August lease rush. Occupancy has been hovering around 89% in this area with an average nightly rate of $90-110. If that holds, we will cash flow better than when all three units were leased.



mwp02ag
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SteveBott said:

Let me check on this
Just checking to see if you had a different opinion that Jay? I suspect not and looks like portfolio is once again my only option.
Jay@AgsReward.com
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AG
The last paragraph of the link answers all the questions as it comes to Fannie Mae conventional loan:

https://www.fanniemae.com/content/guide/selling/b5/4.1/02.html

Now, that does not mean that there is not some Portfolio lender who will do a 30 year fixed on a 3 unit, but it will not be a conventional loan. I can do a 30 year fixed Texas cash out on a duplex as a portfolio loan but not a tri or fourplex.
SteveBott
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Sorry OP I forgot to check but did today. Jay is correct and you have to go portfolio
mwp02ag
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Silly, what's the reasoning behind that? Thanks for checking guys.
SteveBott
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I have a couple stock replies to client that are true but a little cheeky. One is...

"Mr Client you will eliminate 90% of your frustration, stress and angst if you do two things...do not use the phrase 'common sense' or use the word 'logic' when it comes to mortgage." And this is true.

I don't know why Fannie does not want these deals but it could be several reasons. Risk data, state laws etc.
mwp02ag
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Thanks again! Duly noted.
Jay@AgsReward.com
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Mwp02ag,

In case you see this thread again, above I mentioned I can do a cash out on a duplex but not a 3 or 4 unit. Well, I can actually do a owner occupied cash out on a 3 and 4 unit property now. It will still not be a conventional loan but I can do 30 year fixed. If you are interested in taking a look at something shoot me an email which is my screen name here.
Linz02Ag
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Looking to do a cash out refi on my home in The Woodlands. Just sent you an email Jay. Tia
Deats99
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Linz02Ag,

I specialize in refi's and would love a shot at earning your business. Email and phone number are in my profile.

Thanks
A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton
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