I'm in So. Indiana and looking to buy my first investment property and then use the BRRRR strategy to buy my next property or two. I've been pre-approved for a 3.5% down FHA loan which is what I would prefer to do because the low money down but with it being an FHA loan the house is going to have to be in livable condition to meet requirements for the loan. So I'm wondering if the BRRRR strategy still applies? In my area(Southern Indiana) I'm looking at houses in the 30-50k range that if I put about 10k into they should in theory be worth about 50-80k. Thanks in advance for any help!
It would be sort of a hybrid BRRRR/house hack, but it would still work. The only thing is, as Hattie said, you need to live in the property for a full year if you're using FHA financing.
Howdy @Ryan Clevenger
Besides living in it for one year you will have to figure out how to increase the equity in the property. You are starting out with only 3.5% due to the FHA Down payment. When you Refinance you will need to have 20% - 25% equity. That is hard to do in one year with minimum renovations.
Be sure to line up all your ducks before you pull the trigger.