Purchasing properties using BRRRR strategy

[David Pascual]

I need some clarification on using the BRRRR strategy. When you make the initial purchase of a property using this strategy, must it be done buying it cash? OR can the property be acquired using a conventional mortgage loan, do the rehab on the property and then refinance whenever that specific banks seasoning period is complete? I'm aware that banks don't usually give out loans on homes that need heavy rehabs but i mean if it's a home that just needs remodeling because of its old age let's say.

[Christopher Phillips]

@David Pascual

Yes. You can do whatever option fits for financing. However, your biggest discounts are going to come from properties that need a lot of work. The assumption is that your purchase price + rehab cost creates a fixed up property that is still at a discount to market final, which saves you money.

Then you later refinance at 70% of ARV to get your cash back out to invest again.