BRRRR Strategy In DFW

2 Replies

I'm really interested in using the BRRRR strategy to purchase my first property in DFW. I feel like the BRRRR method seems like one of a hand full of ways for a "small shop" to get their hands on RE in the competitive Dallas market (please correct me if I'm wrong).

It would be nice for anyone that has experience using the BRRRR method in DFW to give a piece of advice (or more) for a newbie like me. Any advice is better than no advice, so please feel free to give your input no matter how big or small the advice is.

Also, in efforts to network and meet some of you more experienced investors in my area, I would love to have the opportunity to buy you a coffee sometime and pick your brain! Just shoot me a message.

The BRRR strategy is a great method. There are also renovation products as well, that allow you to purchase distressed homes with financing. It really depends on the property and the amount of repairs as well as your cash on hand, which route you want to go. Renovation products allow you to purchase and finance some or all of the renovation costs, so it works well if you don't have as much cash available. The BRRR strategy at 6 months will possibly allow you to get more cash out if you built up a lot of equity. Below are just a few facts on both routes.

@Cory Dean

 Cash Out Financing-

  • The typical cash out financing is done after 6 months of owning the property, based on ARV and available for mortgaged properties #1-10. Please see delayed financing for less than 6 months after closing.
  • On a primary residence you can pull out up to 80% LTV on a SFR and up to 75% LTV on 2-4 unit multi-families.
  • On an investment property; A SFR if you have #1-10 mortgaged properties, you can pull out up to 75% of the equity and on 2-4 units is up to 70% equity.
  • On an investment property; If you have #7-10 mortgaged properties, including subject you are required to have a credit score of 720.
For Renovation Products - 
  • To be used on Conventional loans for either required or optional repairs.
  • Repairs MUST be permanently attached to the property and add value.


Primary Homes

-1-4 Units

-620 FICO Minimum (660 High Balance)

-95% LTV 1 Unit

-80% LTV 2 Unit

-75% LTV 3-4 Unit

Second Homes and Investment Properties

-620 FICO Minimum (660 High Balance on Second Home only)

-1 Unit - 80% LTV Purchase Only (75% LTV Refinance)

-2-4 Unit Investment Properties now eligible (75% LTV purchase/refinance). Standard Conforming Loan amounts only, NO High Balance.

Allowable Repairs or Renovations

  • Repairs/improvements must be permanently attached to property and add value
  • Cosmetic repairs only
    • "Built-in" kitchen appliances


-Conversion of 2-unit to 1-units

-Conversion of 1-unit to 2-unit by exception only. Borrower must have prior landlord experience or qualify without rental income

Renovation Cost Limits

  • Up to $35,000 in repairs/improvements
    • This includes the 10% contingency reserve
    • Loan amount calculation is Sales Price + Bid + Contingency Reserve ONLY
      • Renovation fees CANNOT be rolled into the loan amount unless it is a REFINANCE and LTV permits.

Note: If cost of renovations exceeds 35k, the Borrower/Seller is NOT allowed to pay the difference at closing from their own funds. If maximum amount is exceeded use HomeStyle Renovation program.

Contingency Reserve

A contingency reserve equal to 10% of the total costs of the repairs/improvements must be established and funded for all mortgages to cover required unforeseen repairs or deficiencies that are discovered during the renovation.

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