Rental Property Investor · Panama City Beach, FL · Member since 2017 · 12 posts · 4 votes
Hi everyone! This is my first post here on bigger pockets, I am a big fan of the podcasts though.
I would classify myself as a new investor, but I'm very eager to learn about new ways to invest. I currently have 5 homes. My primary that I live in and 4 sfr. I want to get into the brrrr strategy on my next investment here, but I was wondering what the best way to go about it is.
Should I put just the minimum down payment? Or should I look for a hard money lender and buy out the home?
Also, is getting a line of credit from a bank or a heloc better than doing a hard money lender? Pros and cons?
Do I need to wait a year before doing a cash out refinancing? Or is that based on the bank?
Thank you all for the help and I'm excited to finally join the bigger pockets community!
Rental Property Investor · parksville, bc · Member since 2017 · 153 posts · 148 votes
9y
I'd put the minimum down, unless you can get money from a hard lender cheap enough. If it's going to take you a few months to get the house rehabbed, and you've borrowed from a hard money lender at a high interest rate, it's going to cost you a lot of money in interest. If you can put the minimum down, and get the rest from the bank at a low interest rate, you'll be better off.
Again, I'd say a heloc is your best option. Hard money is usually the last resort, because it usually carries a high interest rate. That being said, if you are getting it from a family member, or friend, for a low interest rate, then there's no real downside to using a hard money lender.
I'll let someone else chime in on the waiting a year before refinancing. I don't have to wait a year through my bank, but I'm Canadian, rules might be different in the US.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
9y
Jake Ferguson Analyze the property at 100% financed and see if it cashflows, bundle all 4 homes (personally I won't like to bundle to anything my primary) and get a HELOC, a portfolio lender is your best bet, offer the minimum, stay away from HML, they are expensive. You only use HML if you don't have cash or assets, this case you do. HELOC is your cheapest way.