Newbie to BRRRR Financing question?

Question

Hello everyone. I'm in the middle of rehabbing my first BRRRR property and I'm getting close to the refinancing stage. I just called some local banks to check on how to refi. The first one told me they offered a 10 year term for 70% equity with a 6 month seasoning period. The second one said they could do 30 year term 70% equity at 6 months for what I paid ( got a good deal) or wait one year for the appraised value. I have watch many episodes of BP. My question is how can I build a business when I have to wait a year to do my next deal? I see others talk about doing 3 and 4 deals a month. Please help.

Reggie Rearden · Answer

@Michael Fulmer I'm from Graniteville and just completed some BRRRRs that I refinanced with a commercial lender in a portfolio. I'm also a private lender. PM me if you'd like some more info.

Matthew Crivelli · Answer

Banks are becoming a waste of time these days. Go with a private lender, you will be able to get a 30 year fixed at 75%-80% LTV. The seasoning requirements will be less, no taxes, DTI, and the rate will be the same if not better. Banks have had their guidance changed recently. They are shying away from investment properties. They do this by only offering terrible options.

Scott Wolf · Answer

@Michael Fulmer, where are is the property located?  If you post in the local forums you're more likely to find someone in the area that can help you out.  But as @Matthew Crivelli said, a private lender may be your best bet.

Also, another tip.  Use the @ button when you mention someone, it ups the odds of a reply immensely.

Rick Pozos · Answer

I know you WANT to BRRRR, but sometimes you could rehab and sell. THEN you have the 20% to put down or do the rehab or whatever. Maybe BRRRR one and rehab one or two. NOW you have the money for the down payment on the next one.

Or market to people who might be willing to owner finance to you. You would not need a bank at all!!!

Anthony Siano · Answer

@Michael Fulmer

try

RBI mortgage

Lima one capital

Michael Fulmer · Answer

I’m in South Carolina. I’m going to keep researching this. I paid cash for the house and rehab. I wanted to refinance to get my cash back out so I can do it again and again. Thanks for everyone’s advice.

Yue Lehman · Answer

@Michael Fulmer if you want to hold on to the property, the best is probably get a 30 year fixed rate loan. In the podcast, many experienced investors recommend a portfolio lender who lends out their own money as opposed to Fannie Mar or Freddi Mac. Some don't require a seasoning period at all if you can find them. I'm located in California and know such portfolio lender but not sure if you're also in CA.

Michael Fulmer · Answer

I have been on the phone today calling most of the lenders in my area. Banks, mortgage companies, etc. They have all told me pretty much the same thing. The Fed has tightened up the rules for investment properties especially for cash out refinance. So I guess the BRRRR strategy is now going by the wayside? I was hoping for an opportunity to be able to work hard and have a vehicle to accelerate progress. But being only able to buy a house every 6 months is pretty frustrating. I’ve tied up a lot of money in this property. Maybe it would be better to finance my deals the traditional way. Any ideas?

Michael Fulmer · Answer

Thanks Matthew. Can you give me some directions as to what a private lender is? Like I said I’m new to this game. Thanks

Newbie to BRRRR Financing question?

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