How can I BRRR my 3-flat?

5 Replies

I am looking to pull cash out after rehabbing a 3-unit investment property. The purchase price was $285K at 75% LTV. I've called around to numerous banks and credit unions, the max LTV that they're willing to do is 75%. Fannie Mae lenders were even lower at 70%. My agent told me he can sell the building for $350K. However, if the property doesn't appraise for that value, there won't be much of a cashout. Any ideas on how I can find a lender that would do 80% LTV? Or should I looking into other types of lending options i.e. commercial, construction, lines of credit?

After acquiring the property, the units were all updated.  Two units are leased out for $1,200 and $950. The last unit is on the market for $1,150.  Rents were previously $650, $700 and one unit was occupied by the previous owner.

The property is located in Chicago.  Thanks!

@Kevin Chen it's not impossible to find a loan that goes above 75% but it's probably unlikely.  Multi-unit properties usually stick to the 70%-75% range for cash out loans.  The thing I would do is maybe post this in the Illinois forum to see if any local people can give you some pointers.  You would have to find a smaller, local bank who could do this.  That would be your most likely bet.

Andrew Postell, Lender in Texas (#392627)
817-873-0621
Originally posted by @Kevin Chen :

I am looking to pull cash out after rehabbing a 3-unit investment property. The purchase price was $285K at 75% LTV. I've called around to numerous banks and credit unions, the max LTV that they're willing to do is 75%. Fannie Mae lenders were even lower at 70%. My agent told me he can sell the building for $350K. However, if the property doesn't appraise for that value, there won't be much of a cashout. Any ideas on how I can find a lender that would do 80% LTV? Or should I looking into other types of lending options i.e. commercial, construction, lines of credit?

After acquiring the property, the units were all updated.  Two units are leased out for $1,200 and $950. The last unit is on the market for $1,150.  Rents were previously $650, $700 and one unit was occupied by the previous owner.

The property is located in Chicago.  Thanks!

75% LTV is the best you will get for a cash out on a non-owner occupied loan for a 30 year fixed. Commercial could do 80% on a 5 year balloon

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

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