Help with BRRR strategy!!!

5 Replies

Hello BP community! Hope somebody could enlighten me with my situation. I purchased this property with a personal loan for 5 years. My question is, how should I tackle this loan? Should I leverage and let the rent and a little of my money pay for the next 5 years? Pay this loan as fast as possible, so its paid for. Then start saving the cash flow for another property. Or cashout refi? If that's the case, should i buy another property or pay the loan and use the cash flow to save for another property. Any opinions/ suggestions/ criticisms will be appreciated. Thank you again BP community!!!

@Jan Michael Ronquillo congrats on the purchase! The answer really depends on your goal / business model. If you’re focus is building up your buy and hold portfolio, then you may want to consider a refi under a commercial loan. I did this with my first deal and was able to pull out all of my initial investment, and then some to finance my next deal. BRRRR

@Mike Dorneman

Thank you for the response! Well, that is the plan, acquiring several properties. That's why I was wondering on how to proceed with this transaction. I'm also looking for no seasoning loans since I just acquired the property. So, wish me luck and hopefully I could pull this off!

@Jan Michael Ronquillo can you provide some more details on the property?  How much do you think the property is worth and how much of a loan do you owe?  Knowing those numbers would allow us to give some better, specific advice.  Thanks!

@Andrew Postell

Hello andrew! Thank you for responding! I own the house free and it's probably between 55-60k arv. I'm still on the rehab stage right now and hopefully, after reno is done, i could have it on refinance shortly. Any suggestions will really be helpful. Thank you again.

@Jan Michael Ronquillo You should be able to have a 30 year fixed rate mortgage on this property fairly easily. One option is to own it for 6 months, then refinance at 75% of the ARV on the property. Since this is a smaller loan amount the rate you should expect will be a little higher than a more "average" loan amount. Somewhere around 5.75% over a 30 year period. This will make your loan payment be at $260 per month. Not every bank loans on amounts that small so you may need to call around for options but seek a 30 year fixed rate option. Hope this helps!

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