A short instructional transcript explaining a cash-out refinance strategy: the speaker projects property appreciation at 4% per year over an 8-year maturity to a future value of $2.6M, plans to obtain an 80% LTV refinance on that future value (≈$2,080,000), subtracts estimated closing costs (2%) for net proceeds (~$2,038,000), and raises the central question of whether the combined first-position loans (DSCR lender + seller-finance note) will be payable at refinance time.
Questions this video answers
4% per year.
8 years.
$2,600,000.
80%.
$2,080,000.
This is saying that it's going to appreciate at a rate of 4% a year. And this is calculating 4% a year for the life of the loan, I'm sorry, the life of the maturity date. So if you need to pay this off in eight years, it's going to appreciate the property for 4% a year for eight years. So in eight years this property is worth 2.6 million. Then it's also doing an assumption that you're going to do a cash out refinance because that's how you're going to pay off the seller in eight years of 80%. So this is saying, based on a property that's worth now, because we're going to fast forward eight years into the future, 2.6 million, we're going to get a loan for 80% of 2.6 million. That means we can get a loan for 2, $2,080,000. You're going to pay some closing costs. So I have some, I think I just put in 2% here. That basically means when, when you're all said and done, you're getting read close, you're going to have funds for $2,038,000. So that's what your loan's going to look like in eight years. So you need to. The question you need to know when you're structuring this deal is do I? In eight years, my first position loan from my DSCR lender and my seller finance note combined, what does that look like in eight years? Have I structured this transaction well enough so that way I can pay off this note? Because you won't be able to do this refinance without paying off all those loans.
