Brrrr Multifam & Valuation

[Robert Dunbar]

Hi,

I have a triplex which I’m working on. It’s technically a duplex and a house on the same property. It is/was in pretty bad shape but I’m repairing it in order to rent it out. My questions are about how the property will be valued after I’m done fully repairing it and raising rents to market value. I bought the place in bad shape for $255k and will have all units repaired and modernized. This includes new roof, flooring, cooling, paint, appliances, windows, doors, and stucco. Rents are currently $650 in the duplex for each unit. The house is not rented while we work on it. I plan to increase the rent on the duplex to $950 and the house $1400. Is it possible to get a cash out refi after everything is rented at the new price? Looking at my numbers will there be anything there? Thanks for your help.

Robert

[Jack Mawer]

I would talk to a knowledgeable hard money lender in the area who should be able to provide you with realistic ARV, especially if there are similar properties that were rehabbed in your area. In terms of a cash out, most lenders like to see some seasoning (minimum 3-6 months) of owning the property before you can actually tap the equity in the property.