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Updated almost 9 years ago on . Most recent reply

User Stats

374
Posts
120
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Stone Teran
  • Investor
  • Cincinnati, OH
120
Votes |
374
Posts

Cash out financing and rehab rolled into one?

Stone Teran
  • Investor
  • Cincinnati, OH
Posted

I purchased a 55-unit apartment building 6 months ago.  It was half vacant and in bad shape.  We've been fixing it up and will have it fully occupied in month 10.

I bought the building using 60% cash and 40% hard money loan.  I want to do a cash out refinancing in month 13 and maximize what I can pull out for my next purchase.

The problem is that I started a retaining wall for the parking lot and the city stopped my work and said I need a permit.  I'm OK with doing it right, but the new wall + repavement will cost $60k (money I don't have).  The parking lot isn't dangerous but I believe the half-finished wall will lower the appraisal value.  Will banks be receptive to doing a cash out loan for 85% of the appraisal value AFTER the wall and parking lot are done?  I'd even let the bank pay the contractor directly.

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