Can't find $55,000 Cash Out Refinance in Cleveland

[Joe Sullivan]

I am about to make  a cash offer on a duplex in Cleveland.  I would like to follow the BRRRR strategy, get my money out of the deal and subsequently purchase another investment property.  I've tried quite a few lenders - mostly private and been told the loan amount is too small for the market.

The purchase price is $32,000.  The property needs $31,500 worth of work.  I'll be all in for $63,500.  The ARV will be $80,000.  Each unit will rent for $650. Once I've improved the value of the property, I'd like to cash-out refinance 75% - 80% of the value.   I've had trouble finding a lender who will do the deal.  Lenders are telling me minimum loan amounts in Cleveland (and areas like Detroit) are in the range of $100,000.  

I'd like a longer term loan.  I'm not sure one or two years seasoning on a short-term loan is going to change the situation.

I have enough cash to do 2 deals like this before needing to cash-out refi, but I haven't been able to find a portfolio loan that would work either.  

Any ideas?

BTW, Private lenders have asked about my experience.  I've flipped 3 mobile homes, but only 1 in my name.  The other 2 in the name of a partner.  I flipped a home 14 years ago.

[Jerry Padilla]

@Jay Hinrichs Thank you for the mention!

@Joe Sullivan

Loan amounts of less than $50k are more of an issue finding a lender. $100k loan amount minimums are more typical for LLC Financing. Are these properties going to be in your personal name?

Since the renovation is as much as the purchase price....... 

I would recommend with delayed financing - (cashing out prior to 6 months) that you structure the renovation costs into your initial investment to recoup those costs sooner;

You would include on your closing statements (which vary state to state - HUD-1/ALTA statement ) the renovation costs - and have them charged at closing...... This renovation cost now becomes an initial closing cost and can be included with the max that you are able to pull out prior to 6 months.

So with your your given scenerio of purchase price $32k + renovation costs $31.5k + closing costs on your initial purchase = $63.5k plus closing costs

An ARV at $80k is 70% LTV for an investment property. So you would be able to cash out $56k as soon as you finish repairs if you paid cash for the property.