HELOC issues for a BRRRR

7 Replies

Originally posted by @Carmine Myers Jr :

@Jaysen Medhurst Thank you Jaysen, so basically I would have to get a conventional mortgage, in 6 months get a private money loan, pay the house off, refinance though the bank to pay the private money loan off and my tenant's rent pay the bank. Correct?

 Why do you need the private money loan? Just cash out refinance the conventional mortgage. It sounds like you are using a conventional mortgage to purchase the property initially?

So usually you would use cash to purchase and rehab the property and then do a traditional cash out refinance after 6 months or a year to get your money back. The cash can come from a heloc on your personal residence but not the property you are buying.

To implement BRRR you need access to cash. This cash can be from you, your heloc on your personal residence, a commercial line of credit, a private lender or a hard money lender. The goal with a BRRR is to use this cash build instant equity and then get your cash back.