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BRRRR - Buy, Rehab, Rent, Refinance, Repeat

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Olivier M Ouedraogo
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BRRRR with a rehab loan

Olivier M Ouedraogo
Pro Member
Posted Sep 18 2022, 09:39

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.

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Andrew Syrios
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  • Residential Real Estate Investor
  • Kansas City, MO
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Andrew Syrios
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  • Residential Real Estate Investor
  • Kansas City, MO
ModeratorReplied Sep 18 2022, 14:15

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.

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River Sava#2 New Member Introductions Contributor
  • Lender
  • Charlotte, NC
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River Sava#2 New Member Introductions Contributor
  • Lender
  • Charlotte, NC
Replied Sep 19 2022, 08:29

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

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Olivier M Ouedraogo
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Olivier M Ouedraogo
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Replied Sep 19 2022, 19:19
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!

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Olivier M Ouedraogo
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Olivier M Ouedraogo
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Replied Sep 19 2022, 19:22
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.

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Patti Robertson
  • Property Manager
  • Virginia Beach, VA
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Patti Robertson
  • Property Manager
  • Virginia Beach, VA
Replied Oct 4 2022, 17:36

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.

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Olivier M Ouedraogo
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Olivier M Ouedraogo
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Replied Oct 5 2022, 03:05
Quote from @Patti Robertson:

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.

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.