Dumb Brrrr question about refinancing

3 Replies

So I'm looking at a property that is going for 140k, I think it can rent for 1600 with about 5-10k in repairs and it would be worth 170k. First of all can you finance a purchase of a brrrr property? I get it cash is better but you still can get a loan right? Secondly When I try to use the BRRRR calculator the cash flow shrinks after refinancing with 75% arv because why? It's worth more so there is more to finance correct? What happens to my cash down payment from the initial loan when I refinance mortgage? Sorry what am I missing?

@patrick lloyd and @timothy paul russell

Yes of course, cash is best for the obvious reasons, but you can certainly get a hard money loan for the acquisition and rehab (terms depend on your level of experience, but I'd say no experience will get you 80% loan to value on the acquisition and 100% of the rehab paid back in draws) and then get a portfolio loan (if you're under 6 months for property stabilization) or a conventional loan for the end financing if you qualify.

So i guess i think i understand what you mean. You would get 80% LTV so on 140k home i rehab and refi for 170k thats 134k, what happens to my down payment of 20% down? And the part im confused about is for the rehab portion if i put 10k in then i would be able to get that out as well? Sounds like i would need to get it for cheaper or have it appraise higher to make it a good deal?