My Portfolio Lender Won't Lend on ARV! Time to Find a New One?

[Matthew B.]

I moved my business banking to a portfolio lender about a year ago. My intentions were to build a relationship with this small, local bank in order to cash-out refinance some properties down the road. Basically what Brandon Turner just posted about on the BP Blog. He called it the BRRRR strategy.

Well, now I'm ready to refi, and I've been talking with the loan officer at the bank. He says they will only lend on either the purchase price or the appraised value, whichever is LESS! I have a property I purchased for $40,000 at auction that is worth over $100,000, but this bank will only lend 70% of $40,000. Obviously, this kills the BRRRR strategy.

Is this typical or do I need to find another portfolio lender and move my money there?