BRRR Financing Question
I'd appreciate any help from the forum financing gurus out there.
I have a contract on a house for $210K.
Repairs costs are estimated at $50K.
ARV is estimated at about $360K.
I was thinking to finance the $210K purchase via a mortgage (ARM) and put the $50K renovations on my credit cards. This will have me all in at about $260K.
Once the repairs are done, I was thinking to get the house reappraised (hopefully at $360K) and refinance the house at 75% LTV or $270,000. This would allow me to pay off the initial loan, my credit cards, and give me about $10K cash back. I would then rent the house out for a positive cash flow.
Is there a better way to approach financing this? I'd really appreciate the feedback. Thank you.