BRRRR - Refi Rates Feedback

[Nathan Slemmons]

Hi All.

I am working on putting together a strategy on BRRRR for central Ohio area. I previously owned a 4-plex which I sold last year. I would like some critical feedback on loan pricing for the refinance portion of the strategy.

i talked to a regional bank here in Ohio and got the below offering. As I haven't pursued this strategy before I'm not sure if these are reasonable. Closing costs I thought were reasonable but I was surprised at the rates in terms of monthly mortgage costs. 

Any feedback is appreciated.

Min Value Needed

Collateral:

$125,000.00 RENTAL PROPERTY, CENTRAL OHIO

$125,000.00 Total Value

Loan Amount: $100,000.00

Payment Options:

Max Term (mo) Rate Pmt Rate Description

360 5.500% $567.79 (3/1 ARM ‐ Lifetime 4.0% floor & 13.0% ceiling)

360 5.750% $583.57 (5/1 ARM ‐ Lifetime 4.0% floor & 13.0% ceiling)

360 5.990% $598.91 (5/5 ARM ‐ Lifetime 4.0% floor & 13.0% ceiling)

180 6.500% $871.11 Fixed

Prepayment Penalty: None

Contingencies:

Appraisal loan must not exceed 80% appraisal value

Estimated Costs:

$100.00 Application Fee

$520.00 Appraisal

$1,000.00 Loan Fee 1% Loan Request (min $1K)

$501.00 Title Services

$12.25 Flood Determination

$2,133.25 Total Estimated Closing Costs

Appraisal fee can be refunded up to $3,000.00 in exchange for a 3% prepayment penalty (minimum $3,000.00) within 5 years of loan origination. Otherwise, no prepayment penalty.