Lenders Familiar with BRRRR Strategy

5 Replies

@Michael Bonanno

Did you already purchase the property? Or are you still looking for a property? Are you looking to pay cash for the property or obtain financing initially? 

A typical cash out is at 6 months with an LTV of 75% for a SFR investment property and 70% for a MFR.

Delayed financing is when you pay cash for the property and cash out refinance prior to 6 months - There are some restrictions with this route - you can only cash out a max of your initial investment.

Some lenders don't like BRRRR.

They think it is too risky, and may not want to lend to you.  

One time, I told a lender that I'm going to BRRRR, they said too much leverage (their loan ratio to me was only 55%, and still said too much leverage to BRRR), and kind of hesitate to lend the money to me.

Since then, I never told any other lender that it will be BRRRR. I just told them I want the cash-out refinance, and need the money for improvements etc, but I never mention BRRRR again, I don't want to scare the lender away.

Account Closed

Are you using a portfolio lender then? 

A conventional lender follows Fannie and Freddie guidelines and can lend 75% LTV on a SFR and 70% LTV on a MFR for an investment property.

Yes, double digit properties, max out conventional loan already, must use portfolio loan.