BRRRR Strategy with no proof of income to refinance

5 Replies

Hey so I am still in college so I only have income in the summer. I am wanting to use the BRRRR strategy on a home but I am worried I will not be able to get refinanced after repairing the home and finding a tenant. Do

Do you guys think I will have trouble getting refinanced with no income? Does income even matter when it comes to refinancing? 

@Tyler Harris you may not get a traditional mortgage due to lack of W2 or current employment. You can use some hard money lenders for long term notes too. I have used Lima One on there Rental 30 product. I have used RCN Capital for flip funding but they too have a long term note, haven’t tried it yet though.

One piece of related advice, get your LLC setup, put the property in it, and then set yourself up with a CPA or PayChex or something of that sort. Start paying yourself now as the property manager. It takes 2 years of that self employment for most conventional banks to fund you while considering that income. You may get lucky with a small local bank that does portfolio lending based off of just that one property. I didn't have much luck that route but it would be cheaper than the HM Avenue.

Biggest thing don’t give up because 2 or 3 turn you down. Ask them why they did. Adjust your presentation to them based on the feedback.

@David Lee Hall, III

Thank you for the advice. As of now I think I am just going to try and go with a hard loan. But what your saying is that in order for me to get a traditional loan through a bank I will need to show proof of "paying myself"? 

Do you see any problem with be getting the property refinanced within 6 months to a year after purchasing it and repairing it? 

From a self employment perspective, usually banks want 2 years of income proof. Hence starting early if you plan on having this as a career without a steady W2 gig. 

6 weeks is a reasonable amount of time to give for processing said refi.

Can you get said refi? With HM lenders it is all about the property. So make sure your ARV is good. I would recommend you pay for a after repair appraisal from a 3rd party BEFORE starting you repairs. They can help tell you what is needed to meet that final dollar value plus they are independent and don't have any bias you may bring on the ARV. Whether a bank or HM, they will do an appraisal as part of the refi - don't think they will just take your word for the value. 😀