4 Plex refinance after a complete rehab.

[Nicholas Reece]

Thank you biggerpockets community for the instruction and support that has allowed us to be in the position to need to ask these questions.  My wife and I bought an apartment building just outside of Houston with a hard money loan in early April.   The rehab costs have far surpassed our budget due to some masked  issues(missing copper lines in walls, dangerous wiring almost throughout...all covered with sheetrock) Also, the city is requiring us to pour new approaches at "multifamily" thicknesses; about $9k worth.  Fortunately, I had reserves and we are able to roll some of these onto credit accounts.  We are nearing the end of the project and have a few things coming up concerning the refinancing that we need some advice about.

Basic rundown of numbers:

4 units, each is a 2 bdrm with jack and jill bath(1.5), open concept, at ~1100sqft. 

Purchase price:  $110,000

Appraised as/is value at purchase: $130,000

Appraised ARV: Range of $225,000 to $275,000 "depending of finishes" Estimated rents $750-$950. We anticipate the actual value to be higher since the comps were all over the place.

Cash for purchase: $50,000

Hard money loan:  $150,000($80k in escrow) 4 points and 11.9% with a $3k extension fee after 6 mo. 

Out of pocket cash/credit for repairs not covered by HM:  ~$45k

We hope to have them all rented by the end of September and to be refinanced out of the loan before the extension is required. My questions are concerning strategy really. I always intended on doing a cash out refi, but was unaware of the 6 month seasoning. As I have less than a month at this point to refinance and not pay the extension, should I keep looking for private money or lenders with high upfront points and chase the higher 75%-80% LTV, or pay the extension fees and cash out at 70% LTV with fewer fees and lower interest rates? We have a lot of cash tied up in this and I would like to wrap some of these credit accounts up into this loan. There are even a lot more questions due to the unknowns concerning the actual ARV. At a minimum, we should see the highest of the previously mentioned range.

What say you BP?  Thanks for any suggestions, or for any other strategies/vehicles y'all recommend!

[Jennifer Beadles]

Find a lender that does not have a 6 month seasoning requirement or a lower LTV for the cash out refinance. It's a company overlay, meaning it's a specific lending requirement to that mortgage company.

You should be able to call around and tell them you have a hard money loan and your own funds into the deal, you've owned the property for less than 6 months and you want to do a cash out refinance at 75% LTV and want to see if they have a seasoning overlay/requirement. If they hesitate or are unsure, call someone else.

Like agents, there are specific lenders that understand investor loans and many that have no clue.