Financing for a BRRRR

6 Replies

I am looking to purchase my first property with my business partner. We located a house that had been used as a business for the past several years. Due to this, they removed the kitchen to make an office and the upstairs bedrooms are in need of repair. It is listed as not livable due to the fact it does not have a kitchen and the upstairs needs to be repaired. We reached out to some lenders who informed us since the house is deemed not livable, we can not get financing. We have our own carpentry business and plan to rehab the house ourselves and then rent it out. Once this is completed and the house is rented we would complete the BRRRR to pull our money back out.

Has anyone run into the issue of not being able to get financing due to a house being unlivable. If so how did you get around this to be able to get financing. 

@Codey Fabian

Fix and Flip loan all day long.  You can add the rehab costs to the purchase price and get your down payment based on that total cost.  Many lenders do a LTC (Loan to Cost) that allows you to finance 100% of the rehab costs.  These are short term loans, usually 6-18 months.  The exit strategy is either sell it for profit or refi into a long term loan with a much lower rate.  Fix and Flips are typically 9-12% interest and involve buying points at closing.  Again short term loans and this is what they are designed for.  

I have lenders who do these types of loans in more than 40 states.  Let me know if you'd like to explore your options.

Cheers!

Nick Belsky

@Nick Belsky is a fix and flip loan a commercial loan? I figured there was some type of option like this for us. Do you know if there are lenders in Maine that offer this. No one has mentioned a fix and flip loans to us and we were flat out told we cant get financing for a house thats unlivable.

@Codey Fabian

I can assure you that non-livable isn't an issue. I closed on a deal earlier this year, where the property was deemed as a total losses by the insurance company after a major storm destroyed most of the house. The investor purchased it, bulldozed most of the structure, then rebuilt it. I got it financed. My lenders who do Fix and Flip are commercial, which means you'd need to purchase under an LLC. I have messaged them to see if they will lend in Maine. I'll get back to you.

Cheers!

Nick Belsky

Originally posted by @Codey Fabian :

@Nick Belsky is a fix and flip loan a commercial loan? I figured there was some type of option like this for us. Do you know if there are lenders in Maine that offer this. No one has mentioned a fix and flip loans to us and we were flat out told we cant get financing for a house thats unlivable.

Reach out to @David Lichten . He is a local hard money lender that may be able to help.