Cash Out Refi Question - Michigan

[Erik R.]

Hello fellow BPers-

I am pursuing a property in metro detroit, Michigan to potentially turn into a buy and hold SFH rental. I will likely be making a cash offer of $43K, estimate to put approx $20k of improvements into the property, and inevitably would seek a cash out refi.

Question regarding this potential strategy--

- How do I conservatively estimate how much the bank would value this property, after improvements? Is it as easy as estimating ARV through comparable sales, or should I downward revise ARV ~10% to be conservative? Any major factors here to be concerned with as I model this?

-For those who have followed this strategy in Michigan, is there risk of not finding a bank to assign a loan for a SFH rental valued at ~$70k-$80k in a C market? Any specific banks or agents you'd recommend I engage a dialog with?

-In terms of mechanics, is it recommended to engage banks early in the process (pre-acquisition phase or during acquisition) to get agreement on an assessed value based on improvements I'm planning, or is it best to wait.. acquire the property, invoke all improvements, then have it assessed?

thanks in advance for any feedback.

Erik