The seasoning language doesn't match what my broker said on the phone

warrant is right that the paper governs. Adding the piece that actually decides this for you: ask whether the program is agency-style or a portfolio product, because the ownership-period rule tends to be structural in one and negotiable in the other. Confirm the current terms in writing with each lender rather than taking my word for the category.

Also ask about the delayed financing exception, which is a separate mechanism where a purchase made without financing can be refinanced against value sooner if you meet the documentation requirements. It has its own conditions and not every lender offers it. It exists though, and if you paid cash or used a private loan the answer may be different from what you're assuming.

juniper, three lenders. Not because this one is bad, because the same paragraph reads differently across three commitment letters and that comparison is how you learn what's boilerplate. I did this on a much smaller loan and the spread between the three on that single clause was the entire deal.

The clause you're reading is the mechanism that decides whether BRRRR recycles capital or parks it. When cash-out sizes off cost, your loan is capped by what you spent, and the value you created by renovating is unavailable to you until the ownership condition is satisfied. When it sizes off appraised value, the created value becomes borrowable. Same property, same work, different loan.

On your numbers, 165k all in against a 205k target. At 75 percent of value that's a 153,750 loan and roughly 11k of yours stays in. Sized off cost at 75 percent of 158k of documented basis, you're near 118,500 and about 46k stays in. Whether the gap is 35k or 46k depends on which costs they'll count, and holding costs are frequently excluded from documented improvements. Ask each lender that question specifically.

What the answer rests on is your after-repair value estimate, not the clause. A 205k appraisal is an assumption you're treating as a fact. If it comes in at 190k, the appraised-value path returns 142,500 and traps 22k, which is closer to the cost-basis outcome than your model suggests. Underwrite the refinance at a value below your comps and see whether the deal still works.

Get the ownership-period language, the measurement date, the loan-to-value ceiling, and the accepted improvement documentation in writing from every lender you're considering, and confirm current terms directly with them since these vary by lender and program. Your rent of 1,750 against debt service at either loan size is the other half of this, and no lender will size you above what the property's income supports regardless of the value.

The part I'd underline from rena-expert's post is underwriting the refi at a value below your comps. I want the version of this that works when the appraisal disappoints, because it often does. If 190k breaks the plan, the plan was 205k, and 205k was never yours to decide.

I got burned on exactly this, different flavor. My commitment had the value-based language and I still got sized off cost, because the underwriter decided my ownership period started from the recorded deed and the recording ran three weeks behind my closing in that county. Recording timelines are a state and county thing, and mine cost me a month of bridge interest.

So when you ask for the measurement date, ask which document they pull it from and whether they use the recorded date or the settlement date. That's not a hypothetical distinction.

quarry, that's the detail I'm stealing from this thread. I've been building lender questions for months and recording date versus settlement date was not on the list.

juniper, the 26k rehab on a house going from 132k to 205k is the number I'd stare at longer than the clause. That's a 73k value lift on 26k of work. It happens, but it's the assumption the whole post depends on and nobody's touched it yet.

pike has a point. I run crews and 26k buys you paint, floors, a kitchen, maybe a bath, and no mechanicals. If the 205k comps have newer HVAC and yours doesn't, the appraiser may or may not care, but the tenant will and so will your repair line in year two.

juniper, what's in the 26k?

So the money coming back isn't decided by how well the rehab goes, it's decided by a paragraph in a document you get before you start? That's not how any of the videos describe it.

rigging, that's most of investing. The paperwork sets the range and the work decides where in the range you land.

juniper, one more angle. You're solving for capital return. There's a version where you accept a smaller cash-out, keep a lower payment, and hold the thing for twenty years while the rent grinds upward. Slower, and it doesn't stall, because you're not depending on the refi to fund the next purchase. I understand that's not the strategy you came here for.

Asking the thing I'd have been embarrassed to ask: if the lender sizes off cost and I only get 118k back on 165k in, can I refinance again later once the ownership period is satisfied and pull the rest out then?

I assume yes but with a second set of closing costs, and I assume I'd be stuck with whatever rate the market is giving at that point, since no one can lock that in for me today. Tell me if that's how it actually works.

compass, yes, and add that the second appraisal is a second roll of the dice. I've had a property appraise lower at month fourteen than month six with nothing changed but the comp set.

On the scope question, juniper, I'd want your 26k broken into line items with a contingency that's actually funded. My last rehab went from 31k to 44k, and none of the overrun was a surprise item. It was scope creep, me saying yes to a nicer kitchen because the cabinets were already out. The appraiser gave me nothing for it. The refinance sized off a value that didn't move while my basis did, and that's how capital gets trapped without anything dramatic happening.

harrow, the cabinets line is the most useful sentence in this thread and I'm not even buying yet.

Where I'd push back on the three-lender advice: shop the clause, sure, but don't shop yourself into a lender who says yes to everything. I found the ceiling on my portfolio at deal five, and it wasn't the clause. It was that the fifth lender who agreed to my terms was the one who couldn't close in time, and the bridge didn't care.

juniper, ask each of the three how long from application to funding and what has slipped for them in the last quarter. Get a name and a number for whoever actually clears conditions. A better paragraph from a lender who takes 70 days is worse than a mediocre paragraph from one who funds in 30 when you have a bridge maturing.

The person on the phone is usually describing the deal they wish they could give you. I learned that over five years of running a business. Nothing malicious about it. They just don't read their own commitment letters as closely as you did.

Write the questions in an email, numbered, and make them answer in the same email. Verbal answers evaporate exactly when you need them.