Does the brrrr strategy work with 3% down conventional loan?

[Leonardo Gonzalez]

Does the brrrr strategy work with 3% down conventional loan?

[Josh Dillingham]

@Leonardo Gonzalez It is possible to use the BRRRR strategy on a 3% down loan situation but in order to end up with enough cash at the end of the transaction to turn it into another property you'll have to get a better deal then you would if you were using a conventional mortgage with 20% down or paying all cash. I bought a 3 unit property for $120K using FHA 3% down, put $10K into it and it appraised for $160K I would have liked to use the BRRRR strategy and refinance and repeated but I could only refi for 75% which would have been $120K which wouldn't really leave me with anything left to "repeat" with. I would just have a new mortgage with 25% equity. I'm not saying it's a bad deal, I'm just saying it takes money to make money. the BRRRR strategy is about recycling money. if you only have 3% into the deal there isn't much money to recycle. But if you could find a $100K property with 3% down, put $10k into it and get it to appraise for $200k then you would have some room to work, but that would be an exceptional deal.