Looking to cash out of BRRR properties in Cleveland, OH

4 Replies

Looking for some advice and introductions to lenders,

I have a property paid in cash, with no loan that is worth $70,000. I am having trouble finding a lender who will work with me to do a cash out refinance to complete the BRRR method. The reason I am running into trouble is because on an 80/20 cash out the loan amount is only $56,000 and I can not find a lender willing to give me a loan on my rental property for the small loan amount of $56k. I am looking at buying another property cash for 65k putting 12k into it and having it appraise for around $80k in hopes of creating a portfolio loan, if that is even a possibility at this point. (both properties cash flow $1,300/month so they are money machines)

My other option (not ideal) is to put 20% down come out of pocket about $15k, dump $10k into rehab and be $25k into a house that will appraise at for $80k. Problem with that is I would have to have to take out an original conventional loan to start, then right away refinance and get double hit with the lenders fees.

I know I will run into the same issue as before where the money is essentially locked into equity because of the small loan amounts if I move forward and purchase this now house for $65k. 

Does anyone know a lender who does small loan amounts on rental properties at a reasonable rate? I am also extremely interested in Portfolio loans, but I have zero contacts dealing with those types of loans.

Finally, I have an 'excellent' credit score, no debt at all besides 5 other rentals at 75/25 LTV (all cash flow positive) and a job that I claim over 100,000 in taxes, and have three years of consistent tax returns showing that. Finally, single and no kids.

I know a lot of people are much smarter than me when it comes to financing deals, and I am asking you to give me some real options of how to grow my portfolio while still leveraging my cash, and not getting eaten alive by lending costs. 

Thank you everyone for the advice it means more than you know. 

A million thanks,
Chris

Originally posted by @Chris Reynolds :

Looking for some advice and introductions to lenders,

I have a property paid in cash, with no loan that is worth $70,000. I am having trouble finding a lender who will work with me to do a cash out refinance to complete the BRRR method. The reason I am running into trouble is because on an 80/20 cash out the loan amount is only $56,000 and I can not find a lender willing to give me a loan on my rental property for the small loan amount of $56k. I am looking at buying another property cash for 65k putting 12k into it and having it appraise for around $80k in hopes of creating a portfolio loan, if that is even a possibility at this point. (both properties cash flow $1,300/month so they are money machines)

My other option (not ideal) is to put 20% down come out of pocket about $15k, dump $10k into rehab and be $25k into a house that will appraise at for $80k. Problem with that is I would have to have to take out an original conventional loan to start, then right away refinance and get double hit with the lenders fees.

I know I will run into the same issue as before where the money is essentially locked into equity because of the small loan amounts if I move forward and purchase this now house for $65k. 

Does anyone know a lender who does small loan amounts on rental properties at a reasonable rate? I am also extremely interested in Portfolio loans, but I have zero contacts dealing with those types of loans.

Finally, I have an 'excellent' credit score, no debt at all besides 5 other rentals at 75/25 LTV (all cash flow positive) and a job that I claim over 100,000 in taxes, and have three years of consistent tax returns showing that. Finally, single and no kids.

I know a lot of people are much smarter than me when it comes to financing deals, and I am asking you to give me some real options of how to grow my portfolio while still leveraging my cash, and not getting eaten alive by lending costs. 

Thank you everyone for the advice it means more than you know. 

A million thanks,
Chris

 Try NLC loans, MB Financial or Wells Fargo. They all have very low loan minimum amounts. I think NLC & Wells is $50k & MB's is like $25k.

Look at credit unions and find their investment property rates.  WPCU here in Dayton Ohio is 15% down at 4.75% with great credit and 2,500 for closing costs.  

You can buy a property with cash and rehab it with cash only put the house in one persons name like your wife or brother or father.  After the rehab is complete You can get the loan from your lender to purchase the house from them into your name only, long as the house appraises for the loan amount you're all set.  $70K loan with 15% down ($10,500) + $2,500 closing + $500 title +$450 appraisal = just under $14,000.  $56,000 cash out.  

On your second house repeat it.

I'd recommend Wells Fargo. If interested, feel free to message me and I can send you an intro to my Wells Fargo contact that has closed on a >75k property in Cleveland. I believe they have a 6-month seasoning requirement, but if you bought it longer than 6 months ago, you should be all good! Good luck!