I recently start doing business with a new bank. I had two properties finishing up at the same time, so I did two loans with them in the course of a month. A few things transpired that I found frustrating because they hadn't happened at previous banks I worked with.

First, I applied for the loan with what I felt the ARV would be based off comps. But I guess we did much better work with the property, and the appraisal came back higher. So they approved the loan, but I told them I wanted to increase the loan based on the new ARV. I was given push back as to why I would want to do that. I trudged through and explained it didn't make sense for me to leave equity in the property since I'm currently looking to aggressively acquire properties.

The second property came in a little higher, not a crazy amount, but again I requested to the maximize the loan amount. Again resistance. But they approved it with a contingency that there would be a $15,000 hold on the funds. That money I could not take out or use without approval of the CLO, when I went to purchase my next investment property. Their concern being I would just take the money and buy a tesla or something.

Fast forward and I'm closing on my next deal Friday, and they are only releasing 10k out of the 15k. I was told that $5k would be held for the life of the loan. It's not the end of the world, but am I unreasonable for thinking this is wrong, considering I'm paying interest on that $5k, that I will never have access to? Is this normal practice by banks, and I've just been lucky not coming across this before?

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$15k Minimum Balance Hold on Refi Loan Proceeds

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