Another BRRRR Question
I just picked up my third property. First one I used conventional financing (hold as a rental). Second one was a flip that I used hard money for. This third one (another rental) I had enough money in the bank to buy cash. I ended up going with a HML....but an interesting hybrid product where it's traditional HML for 3 months (interest only at higher rate) and then they refinance me to a 30-year fixed. I chose this route because I was afraid of using up all my cash.
I know the BRRRR strategy is intended to refi and pull money back out. But do folks that use this strategy wait until the property seasons (12mo?)....or can you refi right away (just perhaps based on purchase price LTV rather than tied to ARV)?
Hoping I made the right choice. Good news is it's expected to cash flow $350-400/mo with an ROI of 45% and cash on cash return of 23%. Not much out of pocket which leaves me free to go after the next one. But of course I have some HML fees that I would not have had otherwise.
What are your thoughts?