First BRRRR loan falling apart

[Will Pritchett]

So our first BRRRR property was moving along great. We paid cash and renovated and received a great appraisal. Lender said my retirement account would count as reserves (since we would spend most of our liquid cash on the project). Now that we are going through underwriting they say they can't use these funds.

     I was surprised  they would count them originally but they checked with an underwriter and the underwriter said yes. 

     Now my best deal yet may turn into an unintentional flip. I really want to refinance the property and keep it. The irony is that the moment after closing I would have double the required funds. I knew they wouldn't count them as reserves but asked anyway. I was right. 

     I am asking for some brainstorming ideas from this community to help me save the deal and free up my cash. I am probably short about 14k on reserves required. I don't think they will allow gifted money for reserves. I don't think they will allow borrowed money either. I am now looking for portfolio lenders in San Antonio or other options. Please let me know what you think if you have any ideas. 

     My preferred exit strategy is to refinance it and keep it for a rental. A distant second concern is if I have any recourse for being misinformed by the lender. I based my strategy on what seems to be misinformation. 

     Thanks in advance for any ideas you may have to help me resolve this dilemma. 

-Will

[Ralph R.]

Will Pritchett Will if it's something you really want to do get a commercial loan. The down payment is a little higher and the interest is a bit more but they will lend to an LLC and don't care how many loans you have. There will be a balloon and refi down the road a few years. Mine have a 25 year amortization. These loans are based more on the performance of the property than your personal finances.