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 How many lenders did you call? I would literally call all of them that lend in your area until you found one that will do what you want.

@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.

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

You should look for folks with self directed IRAs that would be willing to back you. Our members use REIFA to match borrowers with lenders.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here