Bank will refi on Cost of home + repairs ONLY not Appraisal

[Jake Rhodes]

I went to the bank yesterday and they said if doing the BRRRR strategy they would only give me 75% LTV (if held under 3 years) on the purchase price and the rehab costs. NOT the appraised value.

Example. Buy for $50K put $20K into rehab. Total of $70K. They would do a cash out refi and give 70% on the $70K = $49K . NOT on the appraised value. Has anyone else seen this?  If under 3 years.

If I hold the property for 3+ years before doing the refi, then they will cash out on the appraisal.

They said its to protect their interests.  

Thoughts???

[Nicholas Covington]

@Jake Rhodes

36 months is very excessive. I work with my clients and offer them anywhere between 0-90 days.