BRRR Method with VA Loan

5 Replies

Has anyone used the BRRR strategy and refinanced using a VA loan? I was wondering if there were any additional requirements besides having the house being my primary residence. It would be more like a live and flip but doing all of the flipping work before. Thanks for your time and help.

@Jonathan Luna

There are VA Renovation Loans that cover 100% of the purchase and rehab, so refinancing wouldn't be necessary unless there is enough value to then cash out with VA.

Hello @Tyler Barker

I am currently doing a VA BRRR!

I purchased a triplex that met the strick appraisal requirements but still needed some serious love for $356,000. I worked with both a flipper and appraiser to determine what repairs and renos I should do to get the most bang for my bucks! Once all repairs are completed it will appraise for roughly $470,000 or more.(I can go deeper if you would like.) Once we are there I am already working with my lender to refinance and only pull 10,000k of equity out (repairs costs) but no longer be using my VA entitlement(the key!). At which point I will go shopping for a similar deal rinse and repeat.

Originally posted by @Tyler Barker :

Has anyone used the BRRR strategy and refinanced using a VA loan? I was wondering if there were any additional requirements besides having the house being my primary residence. It would be more like a live and flip but doing all of the flipping work before. Thanks for your time and help.

Yes I've worked with many folks using VA as the product to exit the hard money loan(HML) on a BRRR. Some folks use HML since you can execute, buy, close, and fund quickly or sometimes the property is not in condition that would normally be financeable by conventional or VA loan standards, then other times its purely for speed to close (5-10 days or less).

The advantages of VA are:

- no title seasoning when doing a cash out refinance unlike FHA which requires 12 months and conventional requires 6 months to use new market value for cash out refinance to 70-80%LTV while VA does not (just gotta document rehab costs used to improve property).

- VA can cash out to 100% so if you have lower appraisal values this can help you exit the HML loan and extract more equity out of the house hack property, while if you had used conventional or FHA refinance you may have been severely limited value wise (appraisal risk).

- VA allows for much higher DTI or debt to income

- VA can be much more lenient on credit scores and VA underwriters are encouraged to help work with borrowers to help them qualify (this encouragement is not present on conventional or FHA)

Hopefully that helped, let me know if you had other questions. 

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