Can the BRRRR strategy work with no money down?

6 Replies

Looking to buy my first rental property. I recently paid off all of debt and raised my credit score over 800. Unfortunately after paying all my debt, I no longer have cash for a deposit. Is there any way I can purchase a property with excellent credit and no money down? I would prefer to use the BRRRR method if possible, I am open to any suggestions. Thank you in advance.

No bank will loan you 100% of purchase price.  Especially on your first attempt.  I have 38 units and I still have to put 20% down.  Great job getting yourself out of debt.  Now grind just a little longer and save up the necessary down payment.

@Roosevelt Thomas yes if you get the owner to finance the property 100% and or raise the down payment and repair costs from investors or a partner.

Owner finance ideas:

You could offer full asking price in exchange for 100% owner financing structured in any way that works for you.

It could be straight payments till paid no interest example would be $100k purchase price and you pay $1000 per month until paid.

You could offer interest only with a 5/7/10 year balloon

30 or 40 year amortized loan etc.

@Roosevelt Thomas let's analyze your options...

You claim you want to BRRRR. So inherently there will be rehabbing involved. Which means capital. And you will need to refinance into a long term note when the rehab is complete.

So you're left with a couple of options...

1. Use seller financing with no money down.  Does this exist?  Maybe.  You'll need to find an owner distressed enough to believe in you taking over the payments and ensuring that they're paid, even with no skin in the game.

But then that brings up how you will pay for the rehab...

2.  Take over payments for a distressed seller and use credit cards OR monthly net income for the rehab.

But what if you don't want to do that...?

3.  You can team up with someone who has the capital.  You provide the deal, management of the rehab, and safety of their investment.

I don't know your situation enough to know what's best for you. I would be worried about the refinance part of the BRRRR if you don't have capital right now. Are you sure you'd qualify?

The benefit of a seller financing type deal (seller carry, lease purchase) is that you can maybe hold off on the actual refinance portion until the due date which provides you with ample time to replenish your cash reserves.

@Roosevelt Thomas best of luck to you man! I'm in the exact same boat as you. I'm currently raising money through private money lenders in my circle to cover acquisition costs and rehab costs. Alternatively, I'll cover rehab costs with credit cards and/or capital I accumulate from now till that time comes, and my lender(s) cover the acquisition costs, then repay them first at refi time, then the CC's and hope to not have to leave too much cash in the deal.