Should I Use My Own Cash For Brrrr Method

5 Replies

I have savings of around 90k. I’m looking to buy a distressed property and be all in after rehab at 75k. Are there any cons to using 75k of my own savings, or should I pursue a private or hard-money loan to acquire and rehab a property. Thanks

If you're planning to use the BRRRR method I would use cash. Some other on here may not agree, but I believe buying with cash is #1 cheaper, #2 easier. In theory, after you rehab and rent, you'll be able to do your cash out refinance, and just put your cash right back in the bank for your next property instead of having to pay back your HML.

@Alessandro A. There are benefits of using other peoples money, I just prefer cash. That said, I always make sure I have plenty of cash reserves as well. I like to keep 6 months of living expenses in cash reserves just in case. 

I also think cash is king here. You won't have to rush the rehab and depending on your monthly rent you could potentially see all your money paid back faster than you think. And you won't have to rush repairs to pay back a HML.