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Updated almost 9 years ago on . Most recent reply
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Cash out financing and rehab rolled into one?
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.