BRRRR with a rehab loan
We are under contract for our very first rental property. It's SFH, 3 bedrooms/2baths located in Norfolk, Virginia.
Price: 130k
Repairs: we budgeted 40k. First time so no idea on how to accurately do this. Inspection scheduled for next week so we will know more.
Financing: investor rehab loan at 6.99% with 20% down, 30 yrs. We are hoping to use a HELOC on our primary residence to finance it. Our local credit union offers a 2.5% introductory rate for 1 year.
Rent: $1700 using Zillow last week. now it's estimated at around $2000 on Zillow. BP shows $1750. We used $1700 for the analysis. We will contact a PM tomorrow for more accurate data
Now, the problem, it doesn't seem to work for a BRRRR using a rehab loan since the rehab cost will be rolled into the loan. We want to be able to pull out the money to be able to buy another property.
Not sure if we should pursue it with the rehab loan or look for a hard money lender, use the HELOC to rehab and refinance to pull out the money.
Anybody has experience doing BRRRR with a rehab loan?
Thanks for your time.
Usually you can only BRRRR by refinancing after the property is rehabbed and rented. Upfront, you will either need to put money down or get a private loan.
- Lender
- Charlotte, NC
- 1,111
- Votes |
- 971
- Posts
Hi Olivier-
Would love to connect! I have seen this scenario before and can offer insight...I am near Norfolk too and know the area well
Quote from @Andrew Syrios:
Usually you can only BRRRR by refinancing after the property is rehabbed and rented. Upfront, you will either need to put money down or get a private loan.
Thanks Andrew!
Quote from @River Sava:
Hi Olivier-
Would love to connect! I have seen this scenario before and can offer insight...I am near Norfolk too and know the area well
Great! I just sent you a request. Thanks.
I've been away from BP and am catching up. What did you end up doing @Olivier M Ouedraogo? If you want help nailing down the rent number feel free to shoot me the address as a text or DM.
-
Real Estate Agent VA (#0225186139)
- 7574722547
- http://www.pmivirginia.com
Quote from @Patti Robertson:Patti, we decided to pursue it. We should be closing in a couple of weeks. I'll DM you the address. Thank you so much for offering to look into the rent number for us. I appreciate it.
I've been away from BP and am catching up. What did you end up doing @Olivier M Ouedraogo? If you want help nailing down the rent number feel free to shoot me the address as a text or DM.