Lenders not willing to invest under $100k in a BRRRR

[Gabriel Perez]

I have a property I'm interested in for a BRRRR.

Rough figures:

$45,000 purchase.

$30,000 repair cost.

ARV above $110,000.

Already know a PM in the area and they’re letting me know rents can be around $700-750 so I feel good about it all.

The problem that I’m running into is that no hard money lenders will invest under $100,000 in any deals and this one is about $75,000 in total. They say it’s not worth the small investment. Do you guys run into this problem?

[Jimmy Suszynski]

Originally posted by @Gabriel Perez:

I have a property I'm interested in for a BRRRR.

Rough figures:

$45,000 purchase.

$30,000 repair cost.

ARV above $110,000.

Already know a PM in the area and they’re letting me know rents can be around $700-750 so I feel good about it all.

The problem that I’m running into is that no hard money lenders will invest under $100,000 in any deals and this one is about $75,000 in total. They say it’s not worth the small investment. Do you guys run into this problem?

Gabriel, I am in the middle of a BRRRR right now. ARV is ~$90,000, I need $64,000 to get every penny back.

I called dozens of lenders, local portfolio up to national. I found a couple of local lenders that will give me a home equity loan on a rental property without any seasoning (they do require an appraisal). I found a couple that will do 70% ARV, 80% ARV residential cash-out refinances after waiting for 6 months (the property is in my personal name). I found a couple that will do a lower LTV cash-out at a bit higher rate through their commercial lending departments.

The best rate/term I found was through OwnUp (google them). They matched me with a lender offering an 80% LTV cash-out refi at 4% amortized for 30 years.

It took a few weeks of calling around to find the different options. Many won't touch stuff below $100k, but for every 5 that don't, there is one out there that does.