Why short term loan in the purchase?

[Wen Guo]

Hi fellow members, I read the BRRRR strategy that when you buy, you should always borrow short term loan with hard money, and then refinance it with longer term loan. But why can't you start with 30 year loan and then refinance with another 30 year loan after fixing it?

[Chris Mason]

Hi @Wen Guo,

Typically the property isn't in good enough condition that you can get an Agency 30YF on it.

If it is, however, then that's the way to do it. 

There's a flipper (& occasional buy-and-hold) I work with here in Oakland who makes a killing in part by identifying properties juuuuuuuust good enough to get a 30YF. Or, often, not quite good enough, but she'll (with seller's permission) go patch things up right before the day of the appraisal so that it's juuuust good enough when the appraiser shows up, even if it wasn't good enough when she went into contract.