Investment Mortgage Guy

One of the biggest questions I get from real estate investors from week to week as an investment property mortgage coach is:  Can I pull cash out of my investment property?

I will come back to the answer of this question but first want to give you some back ground on investment property financing as a whole that I feel is important. About a  year ago, there was several options available nationally for the real estate investor for investment property financing. Since October of 2008, all mortgage backed securities another than Fannie Mae and Freddie Mac have left the market. Wall Street at this point, is not trading them. What that means to you is that the only national source you have for financing your investment property is Fannie Mae or Freddie Mac. Out side of that, your option would be to approach a local bank.

Fannie Mae and Freddie Mac require six months seasoning (meaning you have to have owned the property for at least six months) before you can refinance your property. After six months, you are allowed to use the appraised value of your property and borrow up to 75% of it.

Piggy backing on this question, I also get asked all the time from investors:  Can I get a second mortgage or line of credit on my investment property? At this point in time, I am not aware of any lender offering mortgages in second position of your investment property. The credit market has definately tightened.

This is a big problem for the real estate investor who has been using cash or a line of credit to purchase investment properties. Many of these investors relied heavily on quick refinances to keep themselves liquid and ready for the next oppportunity. My rehab loan program is a nice alternative to this. With my rehab loan program, an investor is able to finance both the purchase and rehabilitation of his investment property and then do a rate and term refinance with Fannie Mae (which still has no seasoning). To learn more about my rehab program select the other articles available on my blog or review the tab at the top of my website.

Have a great week!

Rob Bonahoom

Mortgage Coach