Get refinancing through original lender or from someone new?

[Paul OBryan]

My wife and I just got prequalified for the first time in our lives and are planning on making our first small multifamily purchase this Spring. Before we got prequalified I had a long conversation with our lender about our plan, which is basically to follow the BRRRR method. He is an investor himself and understood exactly what I was talking about.

After we received our approval letter last week, I emailed him about a possible construction loan with his institution and his response surprised me.  He said:

"The loan product that the bank has you approved on is for rental property in good to excellent condition, where tenant can move right in. Unfortunately Fannie Mae – Freddie Mac do not offer any construction loan of this type. My suggestion is to look for property in relatively good condition where you can get it rented right away." 

I thanked him for his response but it got me wondering about the Refinance part of BRRRR method. Once we buy and rehab our property, do we try to get a loan based on the ARV from our original lender or from someone else?

I would like to have an ongoing relationship with this lender. Is there protocol around this that I should know about.

Thank you

Paul O

[Harjeet Bhatti]

@Paul Bryan  If you are financing after 6 month you can cash out on current appraisal value. Lenders use appraisal company so they don't have any control on their views about appraisal value.