How to Refi my BRRRR

8 Replies

I am Almost done with my first BRRRR.....

I BOUGHT a 3/1 for 50K...Put 45k into it and now it’s worth about 160k....

I got a two year lease for $1350. I can barrow up to 120k against it.

Couple Questions:

How much equity should I pull out?

What kinds of questions should I ask my bank?



@Logan Briggs Hi Logan,

Congratulations on your BRRRR project thus far!

The first question is based on your current situation, goals and long term strategy. I feel like most people would say to pull out as much equity as possible and put it towards another deal. You have to know what you will do with the money such as put it towards another deal or payoff debt etc beforehand. If you are not doing another project anytime soon it may not make sense to pull out all of the equity and have it sit in a bank. I met with an elder investor recently and they explained that they prefer to use a lower LTV and have a credit line setup with their bank for future deals, this is also a hedge against a correction in the real estate market. For example, you could refinance a property for only 55 or 60% and have the difference added to a credit line. Again, this is based on your personal goals.

You can asked your bank if they offer credit lines and ask how they work. Even if you don't need it for this project this may help you in the future.

At this stage in the process for you I feel like most questions will be answered just by asking for the refinance but you can also ask if their is a "seasoning period".

Are you refinancing in an LLC or your personal name?

@Logan Briggs I apologize that I cant answer your questions but that being said as a guy who is trying to get into my first BRRRR How did you know that the value of your home would go up to 160k after renovating it? And also What was the original value of the home when you bought it? Thanks!

@Marshall White thanks for the insight. That is a great strategy. I like the idea of kind doing a hybrid refi.

I am refi'ing in my name then transferring to an LLC. Any idea what kind of taxes I may have to pay, if any?

Thanks for the feedback,


@Tyler Hill a house down the street sold for 160k. It was the exact same house. I actually knew the buyer. It was on a smaller lot, gravel drive way and no garage entry from the house.

I think we were being conservative on the ARV. It might catch more. That is why I really like your idea of a line of credit. That is very smart.

@Logan Pettigrew

I recommend speaking with a CPA to receive a personalized answer. Generally though, you wont pay taxes on a refinance because it doesn't count as income. I refinanced a BRRRR project this year for a substantial amount and my CPA advised that I would not have to pay taxes on any of it. This is one of the main reasons why I love the BRRRR strategy.

Also, feel free to message me if you have any other questions or somethings else comes up with this project!

Good luck!

Hello mortgage brokers and financiers. Looking for some financial advice here so would appreciate any info from the community.

Current Job Situation:

- Full time 40 hrs a week employee

- Part time real estate investor

- Plan on moving to full time real estate 1st quarter 2020


- I’ve saved my whole life so I landed to own 6 properties debt free

- I have a HELOC out @5% for 180K on my primary residence that I used to purchase another investment property outright. (No plans on paying off anytime soon)

- No mortgages or debt

- Credit score 790


- I am looking to most effectively leverage my debt after I quit my full time job next year and go full time into real estate. I am looking to flip homes so I'll need access to capital quick when deals come up. That is the reason why I have my current HELOC loan

- How should I use my current income to get out as much access to money as I can before I quit?

Some ideas that I’ve kicked around are:

- Leverage my other homes for more HELOCS. The HELOC rates on a investment property are in the 8% range so I cringe when I hear that.

- Get a mortgage out on the home I currently have a HELOC out on at a fixed lower rate. This would free up my HELOC to be used on another property. I'm not sure what this process is called though?

- Get a mortgage out on another property I have which I own outright. I am also not sure what this would be called?

Again, any help on what I should be doing in the upcoming 6 months would be very much appreciated!

Sounds like this should be a WIN on your first BRRRR Logan! Congrats!

I'd speak with either a CPA or a few banks about your options. I would imagine take out as much as you can from the property, if the % work out and you get back all of your principle and repairs $ you put into it. 

@Logan Pettigrew I would suggest you take a look at the new investment option from Ridge Lending. I am working with them right now. They call it "all in One", but it is really (ion my words) a HELOC in first lien position for an investment property. You would get probably 70% of your $160K in that HELOC. The beauty is that you can accelerate the payoff for the property you just finished or you can use it as your own bank. (Naturally, I assume you only touch the money for further asset purchase or development).

I am not a lawyer or CPA, but if I look at your example and pretend you would be able to do the exact same deal again, you could buy #2 BRRR and pay the $50K cash from your property#1 HELOC. Then you renovate using the HELOC associated credit card and pay for the $45K of renovations. When you are done you own a property free and clear that is also $160K, just as property #1.

The beauty is that the cash flow you get from property #2 ($1350 - cost, so maybe $900) can flow into the HELOC of property #1 together with the cash flow form #1 and replenish that HELOC.

The numbers might not always work out this way exactly, but you could keep buying and renovating properties and never really having to finance again as long as you keep servicing the initial HELOC, which is getting easier and easier as you move forward - and its available for 30 years, so you would be set.

You could call this a form of "stacking" that Brendon always talks about in his webinars and podcasts "on steroids".