BRRR Texas - Without Cash Purchase

[Ryan Kephart]

Hello,

Here is my ideal BRRR situation in San Antonio, TX and the problems I am having/trying to figure out. I am a little bit of a newb so please bare with me : ) I would just call around to the banks today but it's veterans day and the banks are closed. I am just looking to advice if my idea is feasible. Any help would be appreciated!

Ideal Situation: Buy with 5% down, Rehab, Cashout Refi when rehab is done, Rent it out when rehab is done, Repeat. Get to 10 mortgages and then refi into a commercial loan. Then repeat.

Here are my problems:

Goal 1: Buy -  Buy with 5% down on each purchase and do over 6 deals a year

      -Initially not a problem, but what about the 2nd and 3rd purchase? Would that have to be 20 percent down? My idea would be to buy with 5% down and refi as an investment property and then with the next purchase, consider that my homestead and put 5% down and not 20%. Is that feasible?

Goal 2 Rehab - OK

Goal 3: Refinance  -  Refinance with 80% LTV as soon as rehab/renting it out is done

              Problem: Seasoning. Do some portfolio lenders not require seasoning? I'd like to do many deals a year and not wait 6 months : )

Goal 4: Rent - Rent it out immediately  

                Problem: Seasoning. I might need to research this more, but I have run into a few problems with seasoning here.             

Goal 5: Repeat - Repeat 

          As mentioned above, seems like I would have to put 15-20% percent down. Would like to just repeat with 5% down if possible.

If I could find a portfolio lender to do my ideal situation that would be great, but haven't found one yet. Any help is appreciated. 

Thanks,

Ryan

[Cham Vee]

Take my advice with a grain of salt

Goal 1: Buy - Buy with 5% down on each purchase and do over 6 deals a year:   Assuming you are financing with bank, 5% downpayment is for FHA loans and I believe it's for only primary residences. Many banks will have a condition that you have to live at least 12 months in your primary residence.

While living in your primary residence, if you choose to purchase another property, it will be considered as 'Investment Property' and generally, you have to put 20% down, and for multi-family i believe it's 25% (Again assuming that you are financing with banks)

Goal 3: Refinance :   Personally, I would run my numbers little conservatively here and consider my LTV would be 70% to 75% just to be on more safer side. Yes general seasoning period is 6 months and yes there are few lenders who can do it after 3 months too but interest rate might be little higher comparatively.

Goal 4: Rent : If you financing with the bank as a primary residence, usually there will be a condition that says 'you'll have to live in the property for at least 12 months. But you can house hack though.

To put 5% down on 6 properties a year, you can even choose to go creative financing route like 'Owner financing', 'Subject to' etc

Hope that helps. Good Luck !