BRRRR Refinance Question

7 Replies

Hello,

I am a newer investor in NOVA (northern VA) looking to utilize the BRRRR method to grow my rental portfolio. I intend on using private money to purchase the property, but as a new small business owner (8 months in), any banks will ask for 2 years of tax returns in order for you to refinance. I cannot get a REFI or HELOC on any of my current properties due to this issue. How will I be able to get a REFI for my BRRRR property? Is Commercial lending my way? Is it different with banks if I purchase it under an LLC?

@Joonsik Park you may have to go the stated income or no income type loan, or maybe a non-recourse loan. They're out there but you pay for them. Probably looking at 7% - 8% interest, so.make sure you are factoring in that additional cost 8n your analysis

@Joonsik Park

You would have to go with a cashflow program - that only looks at the cashflow of the property and not your income. If you have great credit, rates may be slightly less than mentioned above. 

@Joonsik Park Commercial lending comes in handy during the BRRRR strategy for many reasons. Like @Jason D. pointed out, these programs will qualify you without tax returns and base the loan on your FICO + the property's cash flow.  However, 7%-8% is certainly on the high end.  Depending on a variety of factors you can still get this type of thing in the 5% and 6% range.