Apparaisal and Line of Credit

[Account Closed]

Great forum here. Was hoping the experts can help me out. I purchased a property in Oct of 2010. The property had been vacant for two years and needed a bunch of work. Purchased the property for $60,000 and put in $25,000 of work. Took a couple of months for the work to be completed then immediately rented it out. Everything great so far. The property is owned free and clear and next is the mistake I think I made. I went to a "big" bank to try and get financing on the property, mistake being going to a "big" bank. I asked up front if they had a seasoning requirement. They told me no. I think the loan officer didn't even know what seasoning was because she looked confused and needed to check. They asked me about how much I thought the property was worth. I told them $130,000. They told me I would need to get a full appraisal done since I bought the property for only $60k and I was saying it was worth $130k. No problem I can understand that although they acted like I invented the wheel and they never heard of value added improvements and they were acting like what I did wasn't possible. They would loan 65% of the appraised value since it is non-owner occupied, no problem, normal. They qualified me for a loan of 65% of 130k, financial, credit wise etc. I wanted them to qualify me first before the appraisal that way I wouldn't be paying for an appraisal if I didn't qualify financially. The appraisal was ordered by the bank, they used their appraiser and the appraisal came back at 140k. Great, well one problem now the bank is telling me instead of loaning 65% of 140k they can only loan 65% of the purchase price (60k). They never told me this from the start, that was the whole reason why they said they needed to order the appraisal that I would get 65% of the appraised value. They are also now saying there is a 12 month seasoning requirement which they said there was none before. Finally they are now asking me for receipts for the work that was put in. That is fine I have sent the receipts to the bank tonight. I've been a customer of this bank for many years, have six figures in money market and cash accounts with them and have been a very good customer with them over the years. I talked to them today when they requested the receipts and they said once they get the receipts they would make me a counter-offer. I was looking for an 85k loan from them which is even less than 65% of appraised value. Has anyone experienced this and have any advice? It leaves a bad taste with me that this bank is doing business with me like this but do all banks do business like this? I have read on here smaller banks are usually better to deal with so I probably should have went with one of them. Thanks.

[Nick Henson]

It might even be worth it to wait 2 - 3 more months and hit your six months seasoning. Yeah, I've seen the whole process of having to account for every nail that added value. Some people go into a rehab knowing that they will have to do it and keep the paper work (contracts, copies of checks, supply receipts) ready for it.