So I am looking to buy a wholesale deal I have it under contract with 7 days due dillegence to figure everything out. I want to BRR the property but I have some unknowns. The property is 7 units on three parcels of land all right next to each other. I was planning on buying them with hard money and refinincing out of them. I am wondering how a lender on the refinance will handle it because on the purchase side I am buying all three for one price. Will the lender on the refinance appraise them all seperate? Will I have to assign values to each parcel when I close? Should I attempt to conjoin the lots? Also wondering what the best way to approach the deal is on the ARV side of things as the comps are weak but the cash flow makes a lot of sense and I see upside in rental comps.
Yes, the end financing lender will do an appraisal on all three parcels, but it doesn't have to end up that way if you use a portfolio lender. It also depends on how you want to take title.
Ideally, you split the 7 units up to three different purchases to close at the same time.
- the money would be cheaper (conventional money is always the way to go if you can)
- it would be way easier to get comps for the appraisals
- the property is already 3 parcels, so you save the money and hassle of working with the county/city to conjoin the lots
- if you want to sell later, you can sell one or all instead of all
You could do it as a 7 unit as well (without conjoining in some instances), but you have a couple challenges; comping that property will probably be a nightmare and while you may qualify for bank financing, it will be more difficult to qualify if the rental comps are weak because the 7 unit appraisal is going to be based on the income approach.