Pre- Approval or Pre- Qualification for a Cash Out Refi (BRRRR)

[Vittorio Rendor]

Hi Everyone,

I'm attempting to do a BRRRR strategy, and just spoke to my hard money lender and he wants a pre-approval from a local bank/credit union for the cash-out refi before lending the ST financing (which makes sense)

I spoke with 3-5 banks and it seems like there is no pre- approval process if you still don't own the property. I'm not sure how to communicate to it to the banks, how do you guys suggest I move forward with this? Is there a better way to ensure the back-end financing before purchasing the property?

Thanks,

Vittorio

[Michael Noto]

@Vittorio Rendor We have been through this before with some BRRRR deals we have done in Connecticut and what we have done in the past is one of two things:

1. Ask the HML if he knows of any lenders he has relationships with that will pre-qualify you.

2. Find someone at a bank that fully grasps what you are trying to do and who works for an institution that does these types of loans.  

When we started out we call upwards of 50 banks and lenders both local and national before we found one who was open minded enough to finance our first BRRRR. Turned out the bank refinanced a lot of our HMLs clients deals. Could have saved ourselves a lot of time if we just asked them first. Live and learn though.

  If you have rehabbing experience and/or landlording experience it may help putting together a portfolio showing that.  Experience matters in this business and especially with this strategy.