Cost of loan vs BRRR
I'm a newbie and the other day I was on the phone with a mortgage broker and when I asked him about rehabbing and refinancing he told me it wasn't a smart move. He said the cost of the refi might end up eating up any cash I could take out and he highly warned against trying to pull it off. So here I am, wondering, is he right? Does the refi after you get a reappraisal (which hopefully gets the value of the property higher) end up taking too much money of my pocket?
And, because the plan is to refi after a quick fix-up do you go with a shorter term mortgage (i.e. 5 year arm) to keep things even lower cost? I always opt to lock in the longest terms I can.
Thanks,
Lloyd
Most Popular Reply
@Lloyd Stein just like in any business about 80% of the loan officers have no idea what they are doing while 20% are killing it. Find one of the ones in the 20% who knows investing and you will be all set. Buying a property, adding value, and extracting the value through a refinance is one of the most powerful wealth building strategies that exists.