Bank not allowing BRRR?

[Eric Sammons]

Hello,

I've been investing in rental properties for 3+ years now, but I did my first BRRR recently. I bought a distressed SFH back in December for $98,000, and then put about $22,000 in rebab. I estimated that it would appraise for around $140k-$150k now based on the values of nearby houses. I went to a bank to refinance the property (I have done previous deals with this bank and have a good relationship with them). My bank contact called me the other day and said that the underwriter told him that they likely wouldn't finance more than $100k because I had only put $120k into it, even if it appraised much higher. In other words, it didn't really matter what it appraised at, what mattered is what I put into it.

I was a bit surprised and disappointed, as this model defeats the BRRR program of adding more value through rehab than you spend. Has anyone else encountered this, or do you think this is just a solitary bank doing this? Any insight would be appreciated.

[Eric Sammons]

@Jaron Walling Well, I guess it's good to hear that my bank is likely unique on this. I've already put in a call to another lender. Thanks!