Hickory Hills, IL · Member since 2018 · 29 posts · 7 votes
Hey everyone,
I am a new investor that has an interest in completing my first BRRRR (and first deal). I have hit a road-block with financing and was wondering what strategies the BP community has to overcome this obstacle? what forms of financing is used commonly and successfully for a BRRRR in SFH, small and large multifamily?
@Michael Szypulinski SFH and smaller MF can sometime use seller financing but when in larger 100+ unit MF space the seller financing is usually not an option unless the asset is extremely depressed.
Yes. I have been doing some research on this and these are the options I have found...
1. Owner-occupied: Cant since I am in the process of purchasing a home
2. Partnerships: An option. Since I am new this might be difficult.
3. Home equity loan/ HELOC: I have no equity built up
4. Private lending: An option as well but not sure of the laws in gathering money for an investment.
5. Lease options: don't know anything about this.
6. Seller financing:
7. Hard money: Currently in the process of finding potential lenders. I was warned by a mortgage broker to avoid using hard money for high priced properties (interest eats away at any profits).
8. Business lines of credit: to my understanding you need an upfront payment before you can access the money
There may be a few options available for you. If you are a Veteran you may be able to obtain a VA loan where the financing LTV is 100%, meaning no down payment needed. There are also multiple FHA loans available for first-time homebuyers with the potential of putting down as little as 3.5% of the purchase price. Your state may also have a first-time homebuyer program as well. I would recommend talking to a local loan officer to gather information about mortgage requirements. If cash is an issue you may have trouble obtaining financing from a bank. If you absolutely have no means of gathering cash, it may be in your best interest to save up until you have a downpayment for a conventional loan, if you do not meet the requirements for the loan options above. Feel free to message me if you have any additional questions!