Looking to do a successful BRRRR...
Hey All! So right now I have 7 doors, 3 rehabs in process and a new duplex construction half way finished. Needless to say, juggling financing between private investors, HELOC loans, HMLs and new construction financing has been challenging. I was counting on the refinance money of a rehab property I just finished and rented out. It wasn’t a simple BRRRR as the bank that refinanced me is also the bank that is going to finance the construction of two duplexes I’m building on the same property beginning in May so they held some money back as collateral. I get that.
However the same bank who had encouraged me to continue with my “value add” deal approach and let them know about other properties I want refinanced. The financing is through the commercial side of the bank. I have brought I rehab deal to the that I am about wrapped up with. I’ll have 185k into this beautiful split level home in a desirable town and neighborhood near where I love that will sell for over 250k easy. I asked my banker what I need to rent it for to get my 185k back. His response was “2100/mo NNN.” $2100 a month is right in trance but throw another $450 on there to cover taxes and insurance, no way! Why can’t it be simple? At appraised value of 250k, 75% is $187.5k. Shouldn’t I expect that back from a bank refinance on a BRRRR? Do I need to be looking for another bank?
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My local bank requires a minimum of 1.25. Check with them on how they calculated the $2100. I think all of your expenses are in there. No need at add another $450 for property taxes/ins.