Bank has different criteria for evaluating quick flips

[Mark O'Brien]

Wondering if fellow investors have run into this situation. Our current prospective buyers are using Bank of America which is giving the appraiser and our real estate agent a hard time. The BofA underwriter says that property owned by a flipper for less than 9 months is evaluated differently under their guidelines and they want to see our cost of material and labor for the improvements.

This property appraised fine, but the delta is 300k in just 6 months, so they are pulling out the microscope. This is all probably just CYA for the underwriter to be able to agree with the appraiser that the value rose that much in such a short period, but it seems unjustified since the value of a residential property is what someone will pay, not the cost of the rehab. It was a dump and is now a beautiful home, but the buyer's bank is pushing back.

Anyone have any experience along these lines and/or figured out what to say to the bank to satisfy them after doing a flip? Any thoughts or suggestions would be greatly appreciated.