Specialist · Edison, NJ · Member since 2020 · 46 posts · 4 votes
Hi,
I've been researching the BRRRR method and want to get started. For those that used this method I'm curious to know how you went about finding hard money or Private lenders to fund the deals.
@Briana Gilbert The FHA 203k can definitely be used for BRRRR as long as you intend to live in the property for a minimum of 1 year which should be quite easy to do.
If rehab takes 4-6 months, then you move in, then refi after month #6, then you start getting your finances in order for the next property, then you start actively looking for the next property ... and by the time you're ready to buy the next property, 1 year has already passed and you're in the clear! All for only 3.5% down payment!
Your local REIA, BP, Google search... there are so many out there honestly. Stay humble and ask questions, get recommendations from BP in your area for HM lenders as well. Be sure to read David Greene's BRRRR book - it really walks you through the whole process well.
@Briana Gilbert You can ask other active investors here on BP and at local meetups who they use. Find out who is exhibiting or sponsoring meetings around you (look at past events as well). And check out the network list right here on BP!
The BRRRR method can also be done using the FHA 203k rehab loan, or the Fannie Mae Homestyle Renovation Loan or even the Freddie Mac ChoiceRenovation Loan.
@Briana Gilbert BP is a great resource, you can find lenders that are local to your area or a national lender that can lend in many states. Getting a referral from someone who has a completed a transaction similar to yours is also a great way to start
Your local REIA, BP, Google search... there are so many out there honestly. Stay humble and ask questions, get recommendations from BP in your area for HM lenders as well. Be sure to read David Greene's BRRRR book - it really walks you through the whole process well.
Thank you! I'm going to buy the book today and start reading it
@Briana Gilbert You can ask other active investors here on BP and at local meetups who they use. Find out who is exhibiting or sponsoring meetings around you (look at past events as well). And check out the network list right here on BP!
Hi Whitney,
Thanks for this information I didnt realize BP had a network list will check this out as well find local meetups in my area.
The BRRRR method can also be done using the FHA 203k rehab loan, or the Fannie Mae Homestyle Renovation Loan or even the Freddie Mac ChoiceRenovation Loan.
Hi Paul, I have to look into the FHA 203k rehab loan didnt know that it can be used for the BRRRR method as well. I guess the only difference in this method is that I would live in the property instead of renting it out, before refinancing it.
@Briana Gilbert The FHA 203k can definitely be used for BRRRR as long as you intend to live in the property for a minimum of 1 year which should be quite easy to do.
If rehab takes 4-6 months, then you move in, then refi after month #6, then you start getting your finances in order for the next property, then you start actively looking for the next property ... and by the time you're ready to buy the next property, 1 year has already passed and you're in the clear! All for only 3.5% down payment!
@Paul Welden this is a great strategy I have a couple of questions for 4-5 months of renovations, I’m assuming I would need a place to stay but still make the mortgage payments every month?
My next question is would I be able to pull out a cash out refinance from just one year 3.5 down on this property?
@Briana Gilbert Depending on the extent of the renovations, you can certainly live in the property while it's being renovated.
If you cannot live in it or do not want to live in it, the Standard 203k allows you to add up to 6 months of mortgage payments into the loan so that you do not have to pay 2 housing expenses.
Doing a cashout refi requires you to have sufficient equity in the property. So, depending on the purchase price, renovations completed, market conditions, and the after repaired value, you may have enough equity to do a cashout refi in 1 year.