Is the bank really giving me a good deal or am I missing something?

[Ryan B.]

I use a very small local bank for all of my personal and real estate business. I was talking to the loan officer the other day about purchasing some more rentals.

She offered me a construction loan to buy and rehab houses. I will get the first draw to purchase the property, and then 2 other draws during the rehab. At time of purchase, property will be appraised using my repair estimates to obtain an ARV appraisal. They will then loan me 85% of this ARV.

After rehab is completed the appraiser will come back out to make sure I did all the rehab that I said I was going to do. The bank then refinances property into a normal balloon loan they do for investors.

I then essentially have a good rental property with nothing out of my pocket except for closing costs (which with this bank have only run me about $750 with the other deals I have done with them).

What am I missing here or is it just a good deal? Is anyone else getting offers like this?