Lending on Appraised Value

[Greg Horowitz]

I am looking at purchasing a small portfolio of SFR properties below market value. I am interested in putting long term debt on the portfolio, however, I wanted to know if anyone knew any lenders that lend based on an appraised value rather than purchase price. Sounds like the typical strategy is to buy with a hard money loan then refi in 3-6 mos, but wanted to see if anyone knew any lenders to avoid typical short term financing fees. Thanks

[Nicholas Covington]

@Brian Adzadi most banks and lenders will actually only lend lasted on purchase price as long as its equal or below the appraisal. Why would a bank lend you 500k for a home valued at that but your agreed with the seller for 300k. In the old pre 2007 they would do that and you could pocket the rest...they don’t do that anymore.

I’m not understand why you want a lender to lend at appraised value when you already know you are buying it below market value? I’m assuming because you want the extra cash? That doesn’t exist unless you are going hard money and rehabbing the property. Otherwise you will just have to do a refinance later on.