Posted by Redline on February 18, 2002 at 20:39:55:
I’m looking to negotiate a cash deal on a 6 family building with another investor and want to be able to pull my cash out ASAP …
So my question is, how long do I have to own the property before I can refi and pull my money out? I know it will probably depend on the bank - but what’s a reasonable time to expect? 6 months? 12 months?
Posted by Kent C on February 20, 2002 at 04:41:38:
My answer is a resounding…2 minutes!
I do just what you are talking about now. It works ESPECIALLY well when you pay cash. Some lenders are sensitive on the topic of “instant” equity. Some are not. The banks I deal with are not. ALL of them are not, if you ADD value, such as in a remodel. So if you give it enough time to have “done” something to improve the house (ie 30 days) and cite these things, it can make it easier to valuate with the banker. But mine dont care what I bought it for as long as the appraisal gives me a fair valuation.
I might pay cash today but I get my cash back out as quick as possible. I pay for an appraisal myself too, before going to a banker. This gets you a better number when they work for you…shouldn’t …but does. Abstracting is good for 6 months, with only a cheap gap check needed during refi. Bankers almost swoon to see a guy with a house free and debt clear. It is not the same to ask for a loan on a house you do not own and to ask for a refi on a house you own free and clear.
I do like the idea of giving the title enough time to have changed over to your name (been processed) in case of a call to the assessors office when they check to see the status on property taxes.
So to recap. I “feel” like 30 days is a good number. Gives them time to make assumptions, like …you had time to improve its value, even if you didn’t. But if I had a signed deed and a ready abstract and a good appraisal… 2 minutes is enough. Remember, its not a loan for a new house…its a REFI…BIIIG difference…big diference. One is from a position of weakness (may I pleeeez buy this?), one a position of confidence and asset (I own this regardless of what you have to say to my request).
It all depends on the deal. Does it “make sense” to the lender? Usually 12 months. If you are willing to pay a higher interest rate, you can re-fi the next day after you take Title! Everything is relative.
Posted by Kent C on February 20, 2002 at 19:19:38:
Regarding banks and rates. Banks set general policy on lending. The banker moves within the frame work set by the bank. The banker has some lee way about what he might offer you based on his gut assessment of risk. You are not selling to the bank, you are selling yourself to the individual banker.
I’ve talked to many bankers. Some were geeks, some savvy, some Daddy’s boys, some MBA’s. They all had one thing and only one thing in common. A good banker can “smell” things. They have an innate sense to detect things such as truth and fear.
Dont blow smoke. Be honest. Know your business plan so well that you can be discussing the Knicks game yet be able to answer a question about your biz without taking a breath and still be able to finish your game discourse without ever rolling your eyes “inward”. Thats the only way I can describe it. They know when you are rolling your eyes inward and distrust that.
Posted by Kent C on February 20, 2002 at 19:08:22:
I tried going to the mortgage stores and bucoos online stores…they wasted my time. I called all the area banks and took my time talking to them. You want to be jovial and relaxed yet smart. Find a few good contacts. 2 of the bankers are picking my brain to see how they can get into the game.