Bank Construction Loans for BRRRR

[Joe Swanson]

Hello BP,

Has anyone used a bank for a mortgage loan and a construction loan? I am about to close on a property, doing a BRRRR strategy, and I'd like to know some people's experiences with it.

How mine is working...

-At Closing, I will get a loan for the cost of the purchase and the cost of rehab, the latter remaining at the bank.  This is a 6 Mo loan with a balloon payment of the full amount.

-My Contractor and I have written up a Draw Schedule of 4 payments that he will receive from the bank throughout the rehab process.  Rehab is 4-5 weeks estimated.   <-should I have been my own general contractor to receive the money myself to pay the contractor?

-Once the rehab is done it will get re-appraised and refinanced into the end loan (Mortgage loan)  which is a 30 yr fixed rate.

If all goes well, it'll be a very good little deal for us, if some things turn a bit, it'll still be worth it :)

What are your thoughts?  Experiences?

Joe