Lower ARV Refinancing Advice

Lower ARV Refinancing Advice

Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes

Hey everyone! I have run into my first problem as a real estate investor and was wondering if any of you had a possible solution. My wife and I bought our first 3 rental properties, and we are going to BRRRR them. After we do a little bit of rehab on them, they will bring in $900+ a month. The problem is that when I do a CMA on these properties, they ARV will probably be somewhere around $80k, give or take.

My question is that, is it possible to refinance these properties with a low ARV like this? I have contacted multiple DSCR lenders to see if they will refinance these after the seasoning period, but they all want a minimum of $100k a door after the ARV. Is there a way to jumble multiple properties into 1 loan so that it gives the lender more incentive to lend on these? Just trying to figure out how I can get my equity out of these properties so that I am able to keep doing this process over and over. Thank you!

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Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
3y

Look into lenders who offer cross-collateralization. This would accomplish your goal of lumping equity from multiple properties into 1 loan.

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  • Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    3y

    Look into lenders who offer cross-collateralization. This would accomplish your goal of lumping equity from multiple properties into 1 loan.

  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    3y

    @Nathan Harden - Or you can get in contact with some commercial real estate lenders at some small local credit unions and banks. I've seen many people get a commercial loan on multiple properties hence you could go that route. You won't be able to get 30 year money but you can at least have a 5/1, 7/1 or 10/1 ARM. Honestly, I think ARMs are the way to go in this higher interest rate economy. Most people refinance within 5-7 years so that will most likely occur anyway. Might as well take an ARM that offers a 5% interest rate compared to a 7%.

  • Member since 2022 · 81 posts · 30 votes
    3y

    Is there any way to renovate the properties slightly more so that they ARV for 100k? You can also look to find a portfolio lender.

  • Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes
    3y

    No real way of getting them up to $100k, none of the comps support that high of an ARV. I will look into the portfolio lenders some more, haven't had any luck yet but I will keep trying. Do you have any relationships with portfolio lenders by chance?

  • Member since 2022 · 81 posts · 30 votes
    3y

    @Nathan Harden I have not been able to find one for any of the deals I come across, but I was recently given a sharable Rolodex with anything/everything a person would need in Ohio.  If you DM me your email I can share it with you.  Im sure some of the lenders would lend outside Ohio.

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