Investor · Mount Prospect, IL · Member since 2015 · 7 posts · 0 votes
So here I am two years into landlordship with lots of cash poured into my first BRRR and stuck with ridiculous conditions for refinance.
I thought it would be an easy process, had all the math done, turned a mixed use into a fourplex, lots of upgrades but now I find out there is no real refinancing options to recover the cash investment I did to upgrade the property.
I was wondering if there are any way to get a 15-20year fix rate refinance with cash out at closing.
I would talk to the lending manager at several banks close to the property until you find what you are looking for. Some conditions will be standard, but others will not. Hopefully you'll find what you are looking for soon. If it was super easy, I guess everyone would be doing it!
Lender · PA · Member since 2016 · 214 posts · 140 votes
9y
@Cristian Nicolaie who is giving you all of these stips? Have you done the research on the stips? Perhaps they are specific to one lender in which case you should keep shopping around.
The only thing I can take from your post is that maybe the property is not legally a fourplex? I'm not sure. More details would help others as well.
Investor · Mount Prospect, IL · Member since 2015 · 7 posts · 0 votes
9y
It's a legal 4 units, I re-zoned and I built a the new unit in the place of the old commercial space.
The problem with the refinance seems to be the same from different sources, I'm in the "no man's land" zone with the 4 unit. They banks are looking at it as investment property but since there are no recent comparables the MVE is relative and the offers are not appealing at all.
Just wondering what to do at this point, the refinance with cash-out doesn't seem to be an option.
To zoom in on what the issue is, you are saying that no one is willing to appraise it, or no one appraising it is hitting the value you need? Or you haven't even gotten to that point?
Investor · Mount Prospect, IL · Member since 2015 · 7 posts · 0 votes
9y
I have been through the drill and got recently three refinance offers for min. 180mo with little cash back or 300mo with high rate for the cash back I would consider. I have not received an appraisal yet, is just whatever the broker and the lender is estimating for the house value.
I would talk to the lending manager at several banks close to the property until you find what you are looking for. Some conditions will be standard, but others will not. Hopefully you'll find what you are looking for soon. If it was super easy, I guess everyone would be doing it!
I'm really confused here. The number an LO or mortgage broker puts into a computer is not what lenders actually lend based on. On a refinance, the relevant value is the appraised value. Tell 'em to use what you think it would appraise for, and run numbers on that.
Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
9y
@Cristian Nicolaie, @Chris Mason hit it on the head. The loan is based on the actual appraised value. As long as that comes in as expected, your loan is a standard 4-unit investment property cash-out.
Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
9y
Agree with @Upen Patel and @Chris Mason. This whole thing doesn't sound right. If you wanted to gauge value based on comparative analysis, maybe ask a realtor to help comp things out. If the value is $300,000, you should at least be able to cash out to 70% based on a normal conforming mortgage. If you are looking for more aggressive structures, then you would probably need a non-prime/portfolio/private mortgage.