Owned rental property. Need to rehab and refinance.

[Tyler Tomas]

Hi, I have a situation that I haven’t been able to find on previous forums. I own a rental property free and clear. The tenant has caused damage and broken the lease so she is going to vacate in December. My question is this: I need money for a rehab so I can get a high appraisal and purchase a new home. Would it be beneficial to have a pre rehab appraisal to borrow the money for the rehab and then a post rehab appraisal to get the maximum amount of capital for the next property? Or is there a better way to do this?

[Mark Munson]

Hi @Tyler Tomas

An appraiser can do a Subject To appraisal where they give you the AIV (As Is Value) and the ARV (After Repair Value). You just need to supply them with a scope of work that outlines what you will be doing to the property. In your case, if you are borrowing the rehab money, I would reach out to lenders on here through the Lenders tab up top and get quotes on refinancing the property into a rehab loan. You can get the rehab funds and you can get cash against the As Is value to put in your pocket. If you don't need the additional cash, then I suggest just getting a bridge loan where the lender gives you funds against the As Is Value. It all depends on the figures, but you have options. Feel free to reach out and connect on here, happy to explain further and help out if needed.