BRRRR Method + Residential Assisted Living

[Raphaela Sapire]

We are looking to develop and operate a portfolio of residential care homes in texas. From a financing strategy perspective, one method we thought might fit well is buying with cash (which we have for house one), then rehabbing and taking from a 5 BR single story to a 10 BR, and then refinancing. This would allow us to take maybe the same $1M, and put it to work over many homes which is a great match in terms of outcome + financing approach. 

However, Given that the BRRRR method typically talks about this for residential properties, I'm wondering if anyone has had experience refinancing a group home or RALF with a bank? We're getting mixed signals from banks as they don't know whether to value us as a business or home. They say that they'd value us as a residential home (80% LTV, 30 yr term) until they ask who's name is on the title, and here is where its an LLC, not us. Therefore, we'd be a business. We're hearing that we'd need 2 years of operating history to refinance as a business. I'm wondering if anyone has alternate financing strategy suggestions on alternate financing strategies for us for the next 4-6 homes we open over the next 2 years. Again, we have cash for the first home, but its more about thinking about an alternate exit for that cash investor whos lending it to us if we can't use the BRRRR method (unless we can). Thanks so much for any suggestions based on your experience or what you've seen work.

Raffi