BRRRR - Refinance Transition from HML to Bank

[Mike Russ]

Hi Everyone - I closed on my first multi-family deal this week and I am working on two additional leads in the Dayton, OH area. I potentially have more deals than capital and need some insight into using the BRRRR approach, specifically on the refinance piece. I am confident that I can find a hard money lender to fund my initial purchases but I am confused on how to transition out from the HML to the refinance part. Will a bank give me a loan for 75% of the appraised value if I don't have the initial loan with them since I went the HML route?

Example

-Purchase Duplex for $75k and complete $15k of rehab.

-ARV = $135,000

-75% LTV Ratio: $101,250

-Payoff my HML ~5,000

This is where I am confused.... Do I ask the bank for a  loan at this point, if so how do I get money out of this?  I cant technically refi a loan that I do not have, correct?  

Sorry I am really confused here, any help would be much appreciate.  I am going the conventional 25% approach on the deal I closed this week but I want to keep doing deals with limited capital so I need to figure this out.

Thanks,

Mike