BRRRR Strategy Investing

12 Replies

@Timothy Edwards Jr get your credit score up to at least 650. best to be in the 700 plus range. Figure out the average price of a property you want to own and figure out what your down payment and closing costs will be so you can have your target capital number ready. You can check with your mortgage specialist and they can lead you down the right path. You may be able to buy with 3.5% down and as much as 25% down.

If you haven't already, I'd start meeting with lenders, at least three different ones. They're the ones that will be making the calls / answering the questions you asked, unless you go to private lenders or hard money.

@Timothy Edwards Jr whichever is less expensive. If you are short on cash and have a hard money lender lined up then make sure your exit strategy is set up. in this case make sure you will be able to refinance out of the hard money loan into a conventional loan.

@Timothy Edwards Jr 700 or better credit will open you up to most financing. If you're going hard money, you'll need at least 10% of the purchase price, plus lender fees, a third of the total renovation costs, and 3-6 months of payments in the bank.
@Timothy Edwards Jr my first BRRRR was a full gut rehab. I relied too much on my contractor and didnt hold him accountable enough. I should have taken more control of timeline and costs. He used cheap labor for specialty trades (tile, drywall, etc....) which added time when it had to be redone. A 3 month projected reno took nearly 9 months. Other than that, it was a great learning experience, I learned a ton and I have a great tenant in place, cash flow a couple hundred a month, and have 35% equity in the property. All with about $5000 of my own cash invested.