I just started reading David Green's book and realized he says you have to pay cash....I'm in contract on a duplex and plan to use traditional financing, considering a 3/1 ARM and then will rehab, and get a HELOC. We have cash to rehab but not for purchase and rehab. Am I missing something or will my plan still be a BRRRR?
Rental Property Investor · Hastings, NE · Member since 2018 · 57 posts · 53 votes
7y
@Katie Shepard - You do not have to use cash. The problem you may run into with conventional financing the initial purchase with a BRRRR is closing costs. You could have several thousand dollars in closing costs at the purchase then several thousand more dollars again when you refinance and pull your money out. That doesn't mean you can't do things that way but it may be more financially prudent to use private or hard money. The longer you wait to refinance the more congenital financing on the initial purchase may make sense.
Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
7y
well Usually to get a house at a discount to make the brrr work it needs to be repaired and won’t qualify for traditional financing. You either got a lucky deal or will have issues when the bank does an appraisal.