Reposition Refinance Apartment

[Aaron C.]

Hi Everyone, so I purchased my first Multi-Family 20 Unit Apartment complex a little over a year ago as a reposition play on management. The first investor put all the work into rehabbing the property.

It's been a little over a year and I have had this property at 90%-95% occupied for the last 9 months. I started talking to some brokers about refinancing the property and they said that I needed more money into the deal. I only put the down payment and about 20k of capital improvements into it and have brought the income up 60% per month. I bought the property at a steep discount.

Has anyone else encountered this before? Any tips on how to get pass this roadblock. I have my eye on another property and want to leverage my current property for the next deal.

[John Warren]

@Aaron C. I would speak to multiple lenders to see if anyone else is interested in doing the deal. I have found that commercial lenders seem to specialize in different aspects. Some lenders like to do the initial purchase, but are not big into refinances. Others don't mind doing refinances. 

You may need to hang onto the property a bit longer as well. Many lenders will want to see you have a tax return or two completed to prove the new income. I know this isn't what you want to hear, as all of BP strives for the quick "BRRRR". I am just about to start a refinance on a property I acquired in Berwyn in 2017. The commercial deals require a lot of seasoning before lenders will really consider the bump in income.