Upfront Financing for a BRRRR

2 Replies

Hey everyone. I'm planning for my first real estate adventure and hoping to do a BRRRR in upstate NY. I live in Boston, where it's far too expensive, at least for a first timer, but have family within driving distance to NY where prices are much cheaper. I understand all the steps of BRRRR and the strategic aspects at a high level, but have a question around the tactical financing piece.

When working on the initial payment for the dilapidated house, what kind of financing is typically used, and are the cost of the repairs/renovations included in that loan? I'm trying to keep my out of pocket money low and put more on the loan so i can depreciate it over time, rather than paying up front and losing the cash all at once. 

Do people usually use a standard bank loan and pay the 20% cash down then pay cash for repairs?

Is there a type of bank loan that can can cover the expenses as well and I still just pay 20% on a larger amount?

Also, should i be looking to use the same bank for the original loan to buy the house and for the refinancing portion? And, if I am using the same bank for initial loan + reno expenses, what is the point of refinancing at all? Would it be for a lower interest rate?

I'm sure there are some other posts on this so feel free to redirect me if anyone has a good string to read through.


I have a local lender (in TX) that will lend for purchase and repairs, with 20% down.  You may be able to find something like that in the area where you want to purchase. 

Howdy @Marco Fontana

Most conventional lenders will not finance dilapidated properties. So investors use alternative financing to make the acquisition purchase and Rehab. Use cash, Hard Money/Private Money Lenders, HELOC and Private LOC's. Then do a Cash-out Refinance to pay it back.

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