BRRRR method: can someone help me?

11 Replies

Hi there everyone!! We just bought our first rental and are trying to buy another. I thought I knew how the BRRR method would go, but apparently not. Haha. So we bought and now want to refi (in some fashion) and get the equity out of this house to invest in the other rental but every bank we go to says that it's not possible. Am I doing or thinking incorrectly in regards to this method? Can anyone that has succeeded with the BRRR method give me any advice? Thanks so much for any help!

How long ago did you buy the first rental and what do you think the value is after repairs? Typically the banks want a seasoning period of 6 months, meaning they will not refi until after you have owned the property for at least 6 months. There are some banks that allow you to refi sooner. How many banks have you called? Keep calling around. You may also want to reach out to commercial lenders if the numbers still work.

Originally posted by @Alisha Gilliam :
Hi there everyone!! We just bought our first rental and are trying to buy another. I thought I knew how the BRRR method would go, but apparently not. Haha. So we bought and now want to refi (in some fashion) and get the equity out of this house to invest in the other rental but every bank we go to says that it's not possible. Am I doing or thinking incorrectly in regards to this method? Can anyone that has succeeded with the BRRR method give me any advice? Thanks so much for any help!

 Assuming you weren't a cash buyer, did you build a 6 month wait into your timeline? 

@Stacey Paulin That may be an issue! We have only had it maybe a month or so....so definitely not near the 6 month period. We will definitely keep calling around, but it may be just that...maybe we just have to hang tight for a few more months. Thanks so much for the info, Stacey!
@Chris Mason Hi Chris! Thanks for the response! Well, for this rental property, we actually did purchase it with cash? There is no mortgage on this property. But no we have not had it for 6 months....maybe that's the issue?

Yes. Don't give up. There very well may be a bank in your area willing to refi right away. However, most require six months or more. In the meantime fix the rental up and rent it to good quality tenants. Stash away as much as you can for cash reserves. If your DTI looks good you shouldn't have an issue getting the refi when the time comes. Good luck!

Originally posted by @Alisha Gilliam :
@Chris MasonHi Chris! Thanks for the response! Well, for this rental property, we actually did purchase it with cash? There is no mortgage on this property. But no we have not had it for 6 months....maybe that's the issue?

 Oh, then you don't necessarily need to wait six months. Dial for dollars until you encounter a local lender that can spell the words "delayed financing exception" without the use of google or a spell checker.

https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html#Delayed.20Financing.20Exception 

@Chris Mason Hahaha!! Will do, Chris! I didnt think it would be this hard just trying to get some money against it since it has no money owed on it. We are gonna try our local credit union in the morning. Thanks again!!