Issues refinancing on the BRRRR method

[Kyle Beauchamp]

Sorry, this is a little long winded. 

I am having issues refinancing on my first BRRRR.

I already had two single family properties that I had lived in and turned to rentals prior to purchasing this third property.

I bought this one as a strict investment. I borrowed 36k of private money at a very low interest rate on a 24 month balloon loan. I used the private money plus cash on hand to fund the repairs in full. The property was a HUD foreclosure that I got for 38k, 51k total after repairs. It appraised at 82k and rented out in two days.

I tried to refinance before 6 months under the delayed financing exception. The bank would only loan 75% of purchase price even with an 82k appraisal. So I waited the 6 months seasoning period.

I am currently in the refinance process again and was supposed to close next week, taking out the 51k and having a cash flowing property. The bank called today and said that they can't complete the loan because underwriting can't source the funds, as in they don't know where I got the money to buy it. They never asked for bank statements from the purchase or anything. 

Even though the private loan is not tied to the property as a lien, the bank is saying that they can't loan because it wasn't my money that I used to buy it.

My credit score is over 800, I have over 30k cash in the bank, and a debt to income of around 31%. I also have great rental history on my other properties since 2010 and 2014 respectively, with no vacancy exceeding one week. 

I really want to close on this so that I can roll it into another deal. I have my, hopefully, fourth property under contract and we are scheduled to close at the end of the month and I need the cash out. My private lender is letting me reuse the same money and buy another then pay back after that refinance as long as it is within the terms of our two year written agreement.

I just don't understand why the bank won't loan when the property is already rented and will cash flow $150 per month after budgeting 34% for expenses (property management, capex, repairs, vacancy).

Please provide insight.

V/r

Kyle