First time, long time. I count myself as a Biggerpockets success story. We started flipping 7 years ago using BP math/ forums and now have over 30 units and 8 flips completed. Next stop FI!
Having an issue though with my refinance attempt with 1M property and looking for some opinions. Purchased 6 months ago for 1M dollars @ a 9 cap in a small Ohio town. Have increased rental income 16k through tenant turnover, renegotiating commercial units (Mixed use building) leases and rent increases to our below market units. I am ready to get cash out to use for another acquisition but my local bank is not seeing the increase in value due to rental increases? Have I missed something? Their stance is at best building may be worth 60k more making it not worth the refi effort?
Thinking maybe we should shop loan but don’t want to incur appraisal costs if I have gotten ahead of myself on brrrring. Concidering Fannie/Freddie?
@Joe Gieringer Sounds like your almost there. Unfortunately, nobody will cash out refinance you without running an appraisal. If you have terms that your happy with and believe it will appraise high enough to make a 70-75% LTV cash out refinance viable and worth it then why not just pay for an appraisal?
What kind of terms does your local bank have on this deal?
5/1 20 year amortorization @ 5.25. Since local bank is using same appraiser as before I’m afraid they won’t conceed higher value over previous appraisal. Downside of local rural banks is I’ve had to explain cap rate on more than one occasion to loan department 😳
@Joe Gieringer before worrying about paying for an appraiser, make sure your lender whomever it is will know your loan needs under your conditions. A lot of lenders will not accept new value for one year for cash out, they will consider letting you get 75% of your verified improvement expenses paid. You can also have the loan package underwrItten wIthout an appraIsal. The system is rigged to make sure we don’t get rich to fast. 😬