BRRRR refinancing costs high

[Jeremy England]

So 6 months back I bought a sfh with the intention of giving this brrrr thing a shot.  I wanted to end up having zero dollars of MY MONEY in the project.  Hasn't worked out that way mostly because of the refinancing part of the strategy.  

Bought the property for 62000 using a sofi personal loan. I estimated the ARV to be 100,000. (I got the loan for 100,000 because I intended on buying another foreclosure at auction for cash and did not know how much I would need) The targeted house did not make it to auction and I did not see any other houses I thought were good deals at auction. So now I had this 100000 loan and needed a place to buy.

I found a house that I'd had my eye on a while (since it was auctioned) and I bought it from another investor 

There were a couple unexpected cost over runs but nothing too bad.  Roof cost twice as much as estimated, and I had to put french drains in the backyard due to lack of adequate drainage, and a driveway had to be removed (it was buried).  So the project costs were about 3000 more than i anticipated on the project for a total of 16000

Got a tenant using the qualification standards that many other investors use and that has worked great.  Got the place rented for 1000/mo.  by a well qualified tenant who has is johnny on the spot paying rent.  She's been there since september.  

Im creeping up on the 6 month seasoning period so now I'm getting ready to refinance.  I've been paying 1590/mo on this 100000 loan since July.  The principle is now 78000.  (The sofi loan is a 7 year amortized loan and we paid a lump sum back that wasn't used in construction).

So, I start shopping for lenders for a permanent mortgage and am disappointed how much lenders want in fees, closing costs.  

Called quicken loans (that's who my personal home is with) and they wanted nearly 7500 in fees and closing.  This is for a 75000 loan.  3700 of that is origination charges.  2.5 points and then a bunch of fees.  And a rae of 5.5.  Well those terms looked terrible to me.  

So I went to a local credit union here and the fees were much lower, however, still higher than i anticipated.  Plus they want 6% .  Fees and origination were about 1700, but the overall closing costs and escrow are still going to be about 8000 because they want me to payoff the sofi loan at closing.

I still have one other bank to speak with about a commercial loan to see if the closing costs could be less, which I could have used this option immediately but it was a different amortization than I originally planned.  The commercial loan is a 20 year loan with a 7 year balloon.  

Seems any way I go, no way I get all my money back out of this project.  I'll own the house that cashflows (eventually) with 25% equity but I'll end up with several thousand of my own money in it. Its tbd how much but probably in the neighborhood of 5-7k.