Triplex under contract did not appraise looking for options/input

[Jacob Szeto]

I have a triplex under contract that needs a lot of renovation, about $90k. The lender basically says I need to have these renovations done before I can get a loan based on the appraisal. 

The way I see it is I have a couple of options at this point.

1. Have the seller do the renovations with their own capital and raise the sale price. I don't think the seller will be up for it and probably does not have the cash.

2. Put money into escrow and have the seller do the repairs with my capital. This option seems risky to me since I will not have title.

3. Escrow hold-back. Have the lender do an escrow hold-back. This option would be ideal but I don't think the lender will be able to do such a large hold-back.

4. Some sort of seller financing. The issue here is the seller still holds a mortgage on the property. I guess I could be a second position on the property but I still feel like I have a lot of exposure in this situation. 

5. Go hard money to do the renovations and then cash out refi. Probably my fastest but most costly option. To that note any hard money lender recommendations would be appreciated.

Any comments or inputs are welcome and appreciated. I am basically just looking for some input from other who have been in a similar situation.

Thanks!

Jake

[Ben Wilkins]

@Jacob Szeto - @Ryan Murdock has a good approach with using a 203k reno loan. If you roll it into one, your loan will be a little higher but at least you 1) have the property and 2) have the money to do the renovation.

The second option that most would suggest is a hard money lend with a refinance at the end - just be ready to put some work in!

Third option: if the seller is short on money like you believe, you could always attempt to use the appraisal to negotiate a lower price.