BRRR roadblocks

[Sam White]

I am planning the acquisition of my next rental property. I am a big fan or the BRRR strategy in theory.

However I have been going thru it with my banker and there are some aspects I need help on. 

My banker is very REI friendly. Most of his loan book is made up of apartment developments and professional remodels.

When I explain my intentions with BRRR, He continues to say the refi from him would be a Loan to Cost rather than Loan to Value. Which seems to take the BRRR stategy off the table.

Can anyone who has used the BRRR please explain how you structure your refi with the bank?

[Narmina G.]

@Sam White   @Cliff Harrison @Jeremy S.

My investors usually use bridge loan to fix the property and hold. This let's them use BRRR strategy. The bridge loan goes up to 90% and up to 100% rehab funds. After rehabbing the house if the clients chooses not to wait and wants to pull cash out and refi, there is no seasoning. However, they will have to use old appraisal (if less than 6 months from purchase date), they can cash out up to 90% of the purchase price plus 100% rehab cost. This let's them pull the cash out and put the property into another program for 3, 5, 7 years fixed (no income verification). Choice of fully amortized or interest only payments. With the funds they purchase another property and repeat.

They can always use the new market value after 6 months of the purchase. There are several programs for long term loans. Also, they can use portfolio loans (min $500K and 5 properties) and the rate starts at 5% - 6%.

Let me know if you have any questions. I have some of the programs in my profile.