House hack/ BRRRR please help

6 Replies

Hello fellow investors hope all is well, I am closing on 9/15 on my first rental property which has a basement unit I am planning to move into. My plan is to use the Brrrrr for this property, I want to purchase with a hard money loan under my LLC and then refinance out of the hard money into a long term loan. Ideally I am looking for a bank/company that does not require a seasoning period (one of the lenders I spoke to told me per Freddie and Fannie you must wait a six month seasoning period) . I want to be able to pull my money out of the deal once rehab is complete and do the cash out refinance and get a second rental before the end of the year. My question is How would you guys go about it ? One investors mention I can get buy with hard money complete the rehab then I can sell the property to my self .. can you this be done since is a different entity buying the property ? Please help some many questions..

Ps: just started reading the BRRRR book @David Greene but also wanted to hear from those experienced investors who  have successfully used the brrrrr strategy.

Thank you in advance.

Be blessed

Josue Rivera 
 

Getting a hard money loan sounds expensive and dangerous. Especially, if something unexpected comes up with your life or the property. Hard money lenders write their contracts so they don't lose out and if you are late they may end up owning everything. 

What do you mean by you want to do the cash-out re-finance? Will you have enough equity in only a few months?

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@Josue Rivera

I don't think you can do a Fannie Freddy on an LLC owned property. LLC owned requires a commercial loan I believe.

I would not have an LLC, at all. I've been in business more than 50 years, discussed LLC's with several attorneys, discuss LLC's with my CPA almost every year and have always been told there is no benefit that is worth having an LLC. I think many people hear about the pros, but don't study the cons. Plus, managing the money for an LLC can be very difficult and it is too simple to make mistakes and pierce the veil. When 'push comes to shove' in a lawsuit you can bet you have pierced the veil for some reason you don't know and your LLC is worthless as far as protection is concerned.

@Josue Rivera you can refi balance you per the day after you close with Fannie Freddie based off appraised value. There is only a 6 month wait to take cash out above and beyond hard money.

As long as you are majority of llc you can just refi and feed into individual name at close. As mentioned above cannot do a conventional loa. In name of llc