BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Updated almost 2 years ago on . Most recent reply

Point out any flaws you see!
Hello!
I have had many good (in my opinion) ideas but the strict regulations on financing have killed 99% of them. I figured I would lay out my plan here and have the more experienced and professionals maybe point out any issues I might have.
Buying a duplex in cash.
Fixing said duplex up for prob 20k.
Should be worth about 30% more than I put into it between purchasing and rehabbing.
Plan on refinancing through DSCR for 75% loan value (aka getting purchase price, rehab price & closing back out of it)
Rinse and repeat with another project.
Please point out any thing I should be aware of or anything that will make this harder than it sounds. Goal is to get a new property every 2 - 4 months.
Thanks in advance!
Most Popular Reply

$100K purchase price + $20K rehab and you're thinking it should be worth about $156K.
75% of $156K is $117K. Should be close to your initial invest minus fees and closing cost. Keep in mind the seasoning period to use the new appraised ARV. 3-6 months for 70% and 6+ months for 75%
The DSCR would depend on market rents and the new PITIA. Since you're paying cash it shouldn't matter too much. If it falls below 1.0x, you'll just have a lower leverage on the cash out.
Is there anything else that's missing?