Over Budget on rehab loan

[Dave Myers]

I'm in the middle of a multifam BRRR. Acquired the property for 1.6m + 200k (financed) rehab budget with DSCR ARV of $3.1m. Awesome deal, right!? The problem is that the project is over budget: I'm going to end up needing $300k rehab funds, and I don't have the additional $100k to float until refinance. I'm considering going to the bank and being completely transparent to ask for an increase in the rehab loan, but they have a much more conservative ARV in their appraisal based on much lower projected rents ($1,400 avg vs the $2,000 avg we're actually getting on the finished units), so I'd have to convince them of the higher ARV. Has anybody ever done this? Any recommendations?

[Matt Devincenzo]

Assuming you qualify I'd go the 13% HELOC. If it takes you 6 months on a $100K rehab to get the units finished, leased and refi'd then you're going to pay $6500 in interest...what's a refi going to cost $15-20K with closing costs, any points, appraisal etc. etc. High interest for a short duration that you control seems like the way to go to me.