Negatives of the BRRRR

[Rob Haines]

List the potential downsides; what's potentially harder than it seems, unexpected, costly or problematic.

[Mark Collard]

Bare with me in this response, i'm speaking it into my phone while at the airport, so I apologize for misspellings sor typos or grammar problems.

So leverage your power team... specifically your mortgage broker and local regional banks/lenders and any private and Hardmoney relationship you have, I would not only leverage them that I would speak to them and have them Enrolled into your transaction before you buy and rehab, so they can give you feedback before hand, to know how they would fund a refinance and to know what and how they would do their valuation, and any obstacles they may foresee.

After doing this, you will have a handful of feedback from lending professionals that can help you foresee problems, including making sure you have the appraisal conversation/seasoning requirements /Cash out restrictions/Whatever Arbitary requirements they might have.

The power of the regional bank relationships is that they know Local markets pretty much by property and it's likely they will I have looked at that property before, and it's likely they're already familiar with it.

One of the strategies that I use is to always attempt to speak to the underwriter directly…

When you speak to underwriters, they are the last line of defense for any learning institution and they not only know their own risk factors but they know why they would say no to you for your risk factors and can help you plan and see possible contingencies.

Lastly, be sure to discuss loan products and interest rates and other considerations having to do with the loans. Rates, terms, amortizations, Int only, buy down options, LTVs, FICO requirements, debt rations, how you price your income, alternative qualification products, etc. These can help you be nimble when issues come up. And last last... ask about LTV exceptions in case you have an appraisal or valuation issue. I've gotten tons of exceptions over the years.

Hope this helps... glad to share any insight I can.

Coach Collard