Can I BRRRR only using 30 year mortgages?

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Hi BP Community,

Has anybody cashout refinanced a home that was bought using traditional financing? The reason why I ask is because I would like to stay away from HM lenders as I feel like i am under the gun to pay them back asap. Any negatives to this strategy? Hypothetical scenario below.

Property 1 - Purchase Price: 100k

20% Down Payment  - 20K

Renovations - 15k 

Rate with Bank A - 5.5%

After a month of renovations I went to Bank B and asked for cash our refinance. Lets say the property was appraised at 155k. Bank B says they will give me 75% of LTV (155k*75%) = 116,250. After all closing costs I would break even and use my returned down payment to rinse/repeat. Anything I might be missing here?

Thanks!

@Ted Baker The only reason conventional isn't used more often is that they won't lend on properties that need rehab. It has to start in decent shape to be approved, and then there is Less opportunity for value add. If you can make the numbers work, go for it