Problem when trying to refi my first BRRRR

[Richard Forton]

It was September 2018 and my portfolio at that time consisted of a 6 unit building with 3 storage units that is worth $410k and brings in about 4k gross a month, and in a neighboring town I have 3 duplexes and a half of a duplex all within a block a part of one another. 225k, 170k, 150k and 98k purchase prices and rents ranging from $950-$1,300. all units were bought with good tenants or only empty for maybe 2 weeks after I purchased the property and all but one of the duplexes, the 150k one, were upgraded in last few years.

That September I thought it would be a good idea to try my first BRRRR. I bought a duplex next to my others and the purchase price was $130K and I got the owner to do interest only owner financing on the entire $130k for up to 2 years before loan was due. Also my first owner financing experience. Payment is $705 a month. I work full time in Radiology and can do some of the work but in total the rehab took 6 months and about 60k if you include holding cost. Went to refinance the property recently after having new renters for 2 months, $1,100 on each side. I am thinking it is worth at least $210k and can pay the loan off and put 30k or so back in my pocket. The appraisal came back at $150k!!!!!!! Not even worth me doing a refinance right now to pay off the owner financing because I would actually have to put up money.

Anybody ever have appraisal issues like this when trying a BRRRR?

I was excited to get into a property with having less than 20% of the value put up by me and having everything brand new but it just did not work out that way. All my other properties I did the 20% down and had no less than 20% ROI every year. Now this property I have close to 40% of the property value into the property. Making my ROI about half of my normal 20%.