Brrr vs Line of credit

[Jean Felix]

Hi all,

I have a quick question about Brrr vs line of credit. I have a multi family and basically brought it, semi repaired it (was in good condition already for the most part), rented it but did not refinance as I used an FHA loan on it.

My question is on the Brrr strategy part of refinance as I didn't use a hard money lender so no need to repay but now how do I get my money buy if my interest rate at the moment is under 4%. I thought about a line of credit to I guess not get my money back but to reinvestment in another property.

I basically would like to pick peoples brain on this scenario and see what angles I'm missing

thanks

[John Leavelle]

Howdy @Jean Felix

Combining the House Hack (using FHA loans) and BRRRR strategies together is very difficult. The primary reason is you start off with low equity and it takes a long time to reach 20% of the Value. When you refinance you typically must have a minimum of 20% in equity and up to 30%. It depends on the lenders terms and LTV requirement.

A HELOC (assuming that is what you are talking about) will require the similar equity requirements.

Have you increased the value of the property through a significant Rehab?

You may be stuck saving for your next deal. If you are interested in the BRRRR strategy I wouldn't try combining it with FHA (House Hack) unless you can significantly increase the value of the property.