BRRRR-friendly Lenders in Bentonville, Rogers, Northwest Arkansas

4 Replies

Hey all, 

I've been investing remotely in NWA for about 13 years.  Currently sitting at 30 units in the area.  So, I finally splurged and became a Pro member, so I can actually use theses forums in the way they are intended.  :)

Generally happy with my lenders, but looking for some recommendations for BRRRR-friendly lenders in the NWA (specifically 2-4 unit and above multifamily and some SF) in Bentonville, Rogers, Springdale area.

I've attended one of the local meetups and had a good time (I'm registered there also).  Will try to link up next time I'm in country (I serve overseas in the Czech Republic for Uncle Sam), likely July/August and October.  Cheers to everyone. 

Best,

Jamie

@Jamie Atkinson I'm not sure what you are looking for? Most all lenders will allow for a refi after repairs if you want to go that route? Doubtful any will do it for free but they;d surely allow it if there is enough equity in the property. As far as lenders go, I'd recommend Signature and Simmons as we've had good luck with both and they are good communicators. Hope this helps. 

Originally posted by @Dustin Davis :

@Jamie Atkinson I'm not sure what you are looking for? Most all lenders will allow for a refi after repairs if you want to go that route? Doubtful any will do it for free but they;d surely allow it if there is enough equity in the property. As far as lenders go, I'd recommend Signature and Simmons as we've had good luck with both and they are good communicators. Hope this helps. 

Dustin,

Thanks for the quick reply.  Sorry I wasn't more specific.  :)

Looking for an in-house lender for commercial refis/BRRRR. 80/20 LTV on multifamily and a general eagerness/willingness to do these kinds of deals (I've found that some have restrictive in-house policies that prevent full cash-out, even if it appraises).

I'm coming out there in the summer and want to meet with some lenders.  Hopefully, I'll be able to get back to one of the meetups (I believe we met briefly last summer).  Would you mind PMing me some folks from Simmons and Signature that you recommend?

Kind regards,

Jamie

@Jamie Atkinson .... I'll lay out a scenario and you tell me if I'm aligned with what you're looking for.... 

You purchase a property for $100K with an appraised ARV of $200K and $20K in repairs and they require a 15% downpayment... So you're initially out of pocket for $15K. Below is the running balance....

Purchase - $100K 

Downpayment - $100K - $15K = $75K

Repairs - $75K + $20K = $95K 

You then want the bank to give you back your down payment 

Total loaned - $95K + $15K = $110K to an appraised value of $200K? Or do you want to take out more?

Regardless I think any and all banks will perform some variation of what you're asking for. The question is what you are willing to pay to get there... 

Example: Bank 1 gives you a construction loan and requires 15% down based on PURCHASE price and 1% origination on loaned $$$ BUT requires you to refi at the end of the project and pay another 1% on loaned $$$.

Example: Bank 2 gives you a construction loan which converts into a 5/1 ARM and requires 15% down (rolled into the loan) on finished project cost including your cash out $$$ and charge a 1-2% origination.

You could always flip these back and forth between 2 banks but in that case you're going to be paying origination coming and going unless you're doing the volume to negotiate it out. 

In either of these instances I'm 95% sure they will require you to move deposits. 

Dustin,

Thanks for the note.  The scenario I encountered may be a little bit different.

Purchase $145k

Repair cost $5k

Appraises at 170k.

Bank policy is 90% of purchase price, plus improvements or 85% appraisal, whichever is less. In this scenario, the loan amount is $135k (90% of purchase price, plus improvements). If done with a simple 85 LTV, it essential cashes out (what I wanted to do). In this case, I'm left with $10k of my own money stuck in the deal.

Furthermore, they're saying they ideally want to see an investor own the property for 2 years to ensure cash flow.  

I like this bank, and they've been great on non-BRRRR deals. It just seems that either I don't know how to BRRRR properly (not unlikely), or they are hesitant to do these kinds of deals.

Regarding my repairs, I targeted some low cost, high impact areas to affect appraisal pennies to the dollar.  

Perhaps I'm missing something, and if so, shame on me. It's still a nice cash flowing property, but I didn't quite get to the finish line regarding BRRRR.

Does that make sense.

Best,

Jamie

Create Lasting Wealth Through Real Estate

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

Start here