How To Use Hard Money In BRRR Strategy

[Treasa Manigault]

Hi,

I wanted to ask how you would go about paying a hard money loan back for the BRRR strategy. Is it that you pay the hard money back once you have refinanced? Can you please give an example? Thanks.

[Chris Seveney]

Yes pay back at refinance. Let's say you buy for $150k and renovate for $50k. Your all in is $200k. You would get a fix and flip loan that would finance approx $160k of that so you would still need $40k plus you would pay around $2k a month in interest

once complete you refinance into a DSCR loan at 75% of appraised value. So if you added value and let's say it's worth $250k, you could refinance $187,500 and payoff off the hard money lender and in this case get back some of your investment