I have used in house financing mostly with community banks, 15 to 20 year amortization, 3 to 5 year renewals. have repeated it many times with different banks. I have talked to hard money lenders but as of today haven't used one. Absolutely no issues with using them . I guess when I have maxed my borrowing potential I will be more than happy to work with one.
I don't have the bRRR strategy down, I have never refinanced at the end. Just kept my increased equity's as a leverage point in case I have a Cap Expense show up.
Have paid cash for a couple to give me the increased cash flow in rental income.
flipped a couple for Quick Cash.
I am always looking for that diamond in the rough where I can max my potential.
my strategy is reinvest, reinvest for the long haul.
Tyler , the local community banks have worked best for me. I started out with no money down foreclosure deals. That worked, kept doing it. tried other banks, worked there also. They seem to like the idea i am not taking out money, I have a job and it pays my bills. Everything is reinvest, reinvest. The hardest part is getting the first one. after that it becomes easier. The best advice I can give anyone is If the bank says NO! when you walk out look across the street and there will be another one, if not Three. you will finally find the person who deal with real estate. Today deals are harder to find that meet my criteria, than finding financing.
@Tyler Emerson , a couple of challenges here. Long term financing on properties $50-$90k value is very challenging (typically you want short seasoning requirements for BRRRR that most banks don't like). You also will need more than a few grand to get started. appraisals, closing costs and down payments are a must have even in HM lending.
No matter where you are, I think the best way to finance up front is with private lenders (not hard money lenders) and local, community banks for the refinance side.
Tyler, once you find a real estate investment banker. They can do all kinds of creative financing. We just finished a house bought under a construction loan, finish the rehab, and then went to a fixed rate mortgage. Yes appraisals, closing costs can be included in the loan. but I have a long history of purchases with this bank. The one across the street, said No to first one. Over 50 houses later that banker would like to talk to me. It's a business, I do what I say, And have proven it to them again and again. I finally have developed a line of credit with the bank. Now I buy it and take the paper work back for the mortgage or what ever direction I need to go.
My Worst experience with a bank was a cash out refinance, The house appraised for 122k and paid for free and clear. I went for an "on line" bank out of Missouri, I borrowed 80k (65%) of the appraised value. that loan took 6 months, they wanted my paystubs for the last two weeks about 8 times during the process. (credit score considered excellent) It Finally went through. I swore I would never try that again. Even after the loan closing a month later they were calling me and asking for my paystubs. I asked them what are you doing trying to market my loan? the answer was yes.
And no it was not in Springfield! for Gregs benefit.
Finding a Real Estate Investment Banker is the Key. Someone higher up in the organization, with the ability to make a decision. I was doing business with 5 different banks, two were acquired out now it's three. One is more stringent than the others, but he just doesn't get the Deals the others do.
@Ray Fisher Did you ever end up finding a bank that would do cash out refi's for BRRRR after your bad experience? If so, would you mind sharing the name of the bank as I am trying to find local banks to work with from out of state.
Shane I have pretty well stayed with the in house loans, borrowed the rehab , and closing in with loans, Finished rehabs and hold approx 30% equity in the sfrs, Occasionally something comes up and I go back and refi for the problem. mostly i buy and hold, reinvest everything to pay off loans, This is the year (15) our domino effect has kicked in, one will be paid off about every 6 months now.