Refinancing Long Distance BRRRR Deal Right Now, Can it be done?

Question

Hello BP Family,

I am currently rehabbing a Long-Distance BRRRR Deal in Tampa, It is a SFR 2/1.

So far so good on the process, rehab is going great, I am under budget, for now, Pre Rehab appraisal was solid, and we are ahead of schedule. I should have it rented by mid to late August for between $950 - $1,100/month.

I wanted to get the jump on my refi, so I went into my commercial bank to speak to a lender about what it will look like. I am planning on speaking to any more lenders, of course, however, the scenario I was given by this bank was not great.

They are only offering HELOCs on homes they hold 1st position on, they require 740+ credit (I am around 700), they are only doing 70% LTV, and they are not doing Cash-out refis on Investment properties.

I was told all this is fluid and can change by August, I am going to continue talking to lenders to see their criteria. But I wanted to know what has everyone's experience been with this right now?

Thank you so much for all your input and support.

Anson Young · Answer

Smaller, local banks have been the best bet for those I know who have refinanced lately. @Andrew Myers recently made a note on this in the BP facebook group.

Andrew Myers · Answer

Hey Coty - local to the property. I spoke to one of my lenders today (small local bank), and they're looking to make loans as they are in growth/expansion mode. They've also seen activity take a bit of a pause during COVID so they're "hungry". That's just one bank's position.

Def get some referrals from RE contacts you have there of you can - much better than a cold call - and build some solid relationships with local banks (if you haven't already).

Ps great BRRRR project, I hope you get to the finish line with infinite returns!

Michael Gilman · Answer

The capital markets have largely loosened up since the covid paralysis though underwriting has tightened with increased credit score requirements. Many local and regional banks are limiting the pipeline to existing customers or local investors. Its bank by bank so worth shopping around. If you are having a tough time you could also consider hard money. Feel free to message me for hard money or mortgage broker contacts.

Coty Dolan · Answer

Thank you so much, gentlemen! @Anson Young & @Andrew Myers

For clarification local banks and CUs, local to the property correct? or Local to myself?

Andrew Myers · Answer

Thanks @Anson Young! @Coty Dolan Yes, I would talk to local banks - community banks and credit unions. I did a BRRRR recently and refinanced right before COVID hit hard, received great terms - those might have changed though. I'm going to chat with a couple of my lenders (who are all small and local banks) to see if their standards have changed since the worst of COVID. I'll follow-up if I find anything out.

Refinancing Long Distance BRRRR Deal Right Now, Can it be done?

Refinancing Long Distance BRRRR Deal Right Now, Can it be done?

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