Cash out refinance after project completion
Hi everyone, I’m ready to spend $400k to turn a building I bought into a nice 6 unit apartment complete with individual water meters, sprinkler systems etc. I estimate rental income at $1650 each unit which is ideal for nurses and researchers at the university nearby. I plan to cash out refinance a few months after completion. I’d like to know what a reasonable appraisal value can I expect for a cash out refi? Will it be based purely on rental income? by jginspace558 from Berkeley, California. Jun 9th 2022
Dan Paladin (dpaladin)
#356 ranked lender in California - 792 contributions
Income will be considered...as well as comps. Lenders will look at the debt service to determine max loan amount as well. Feel free to contact me to discuss further. 562.261.5500. Thanks
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
The standard traditional mortgage loans will allow you to take cash back out up to 75% of the appraised value of the property once finished (assuming your debt ratio allows this). We will also use 75% of the actual documented lease income as qualifying income to determine your debt ratio when the property is new, and not yet reported on a tax return. Once there is a tax return (Schedule E), we will use what you report as income (rent, minus, costs) on the tax return to determine positive rental income. I provide home mortgage loans in MN, WI, IA, ND, and SD. Find me at JoeMetzler.com - Cambria Mortgage, NMLS 274132
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