I have a property that I've invested 40k in total into the house. Purchased it a little under 16k. This purchase is all cash. I'm trying to utilize the BRRR Method but I've hit a wall. I've had a tenant since June 26,2020. Rent is 900 a month she pays all utilities. I've had the house since July 2019. I'm finding it difficult to get a loan on the house due to not having it rented long enough. Also, I have been told that there is a curing period since I purchased the house so cheap to see if rent is stabilized. My house is also in my LLC name so certain banks will not accept it.
My question is what should I do in order to use my property as leverage for the next deal?
@Shaniquea Fails missed an R in BRRRR METHOD....
Is this your first property? I'd advise against putting any properties in an LLC prior to refinancing if it's a part of your strategy. Banks are annoying about it.
Not sure what your expenses are over there but $900 gross monthly rent on a $40,000 total investment should give you a great return while you are waiting on various loan options.
It is difficult on the lending side to do a cash out refinance on a small loan size. There are Qualified Mortgage (QM) rules that are required to follow, basically banks can not charge you high fees in proportion to your loan size. Small loan sizes max this very difficult to follow. This is the downside of smaller sales price/loan sizes, financing can become more difficult for lenders to stay in compliance.
@Nicole Heasley this is my first property and the property is already in my LLC.
@Darius Ogloza it has! The seller was motivated!
@Zach Wain exactly, I’m thinking about getting another property and doing a blanket mortgage type of deal.