How Can I Finance a BRRRR as a Soon-to-Be College Graduate With Limited Money?

Question

Travis Timmons · Answer

You don't. BRRRR is a cute term, but after doing some major rehabs, I'll tell you what it really is - you are buying an absolute mess of a property. And the ones the come close to working as a BRRRR usually do not qualify for conventional financing. You need cash, a line of credit, or hard/private money (which is very expensive and dangerous if you are new and don't know what you are doing) to take a deal down.

Once you line up the financing or cash, then the real fun begins. You can do inspections and due diligence, but you really don't know what you have until you already own it, start taking it apart/cleaning it up, and begin to wonder "What the he** am I doing? Why did I think this was a good idea?" pretty much every time you visit the property. I've never done a renovation that finished on time and/or under budget. It will cost more than you think it is going to and will take longer than you expect. If you do not have HEALTHY cash reserves, you'll run out of money.

If you do manage to somehow pull it off, you then have to stick the landing and get the appraisal and refi to work with your numbers. In many ways, that is up to the market and out of your control.

You have no experience and no money. Go get a good job and do 3.5% down FHA house hack. The simplest option is the best option. I'm not going to beat you up without offering to help. We were all new at one point. Feel free to send me a DM if you think that I can be a resource. I have absolutely nothing to sell.

Kerlous Tadres · Answer

Hey @Brice Peterson, I’d recommend starting with an FHA or low-down duplex/4-plex house hack, live in one unit, rehab, and rent the rest. Build credibility by networking with investors and showing detailed deal analyses, even before you buy.

Denise Supplee · Answer

Hi @Brice Peterson nice to meet you! With limited savings, the key is to focus on strategies that lower your entry costs and build credibility. FHA or other owner-occupant loans can let you buy with a low down payment and gain experience managing a property while you live there, which also helps you qualify for better financing later. Partnerships are another strong option if you can bring hustle, market knowledge, or deal finding to the table while someone else brings capital. Start networking now with local investors, lenders, and agents so you can build relationships and a track record, even before you buy. Spend time learning how to analyze deals and neighborhoods so when a good property comes up you can move quickly—lenders and partners will take you more seriously if you clearly know your numbers. Early on it’s usually smart to focus on finding a solid deal first, but be talking to financing sources at the same time so you know what’s realistically available when that deal shows up.

Michael K Gallagher · Answer

the cleanest and lowest barrier to entry is to go get a solid W2 job, if you need to move to an affordable market to do it, go for it, your young, get into an "up an coming area" see if there are any local banks offering "grant loans" or other incentives to purchase and live in certain areas.  Buy something that's been flipped or better a new build.  get as many units as you can afford (ie up to 4), stick to townhouse style units if you can.  Close on the 1st or as close to the 1st of the month as you can so you get teh longest time without a payment to get the units leased up.

Rince and repeat.

Tricia York · Answer

Find a job that pays enough to qualify for a conventional loan. You don't have to love it or have it fulfill your every dream. Then find a fairly decent cheap house. Rent out your extra rooms. Deposit the rent for future purchases. Never be late on a payment.

Rinse, repeat.

Arman Ahmed · Answer

@Brice Peterson

Brice, I like that you’re thinking about this early. A lot of investors I know (myself included—I invest in the Midwest) got started with little capital by leaning on house hacking with FHA/owner-occupant loans, partnerships, or private money. The key is building credibility by networking, learning to underwrite BRRRRs, and bringing real value to the table. I’d suggest working both sides at once: sharpen deal-finding so you know a winner when you see it, while also lining up financing relationships so you can move quickly.

Matt F. · Answer

To BRRRR, in the simplest terms, all you need is a loan and a property that makes sense.

Keep it simple.

Find your area's 1-2 reputable hard money lenders, and ask them what's necessary to qualify for a BRRRR loan (credit, cash, assets).

Find out the terms and go from there.

You may need a co-signer like a parent.

Elealeh Fulmaran · Answer

Congrats on getting started! If you’re light on cash, I’d suggest leading with an owner-occupant strategy (like FHA or house hacking) to keep the down payment low and learn the process. Another option is pairing a small private loan with a rehab-friendly product, then refinancing into conventional or DSCR once stabilized. Keep rehabs light at first to lower risk and test out your contractor and PM before scaling.

To build credibility, put together a simple one-page deal story that covers your buy box, numbers, exit plan, and risks with mitigations. Line up your core four (agent, lender, PM, contractor), and give consistent updates so people see you executing. Work funding and deal flow in parallel: secure soft capital options and have a lender conversation now, then double down on finding deals within a tight buy box. Real commitments show up when you bring a viable deal.

Scott Chilton · Answer

Hey Brice, a good first step with limited cash is to look at house hacking since you can use low down payment loans while learning to manage tenants. Partnerships or private money can work too but you will need to show that you understand the numbers and the plan for the exit. Building relationships with local lenders and agents now will also help you look more credible when a deal comes up. I would focus on learning how to analyze deals first so when the right one appears you can match it with the right financing.

Patrick Roberts · Answer

This is the correct answer. Real estate requires cash or access to capital. There's already enough risk inherent in flipping properties, so there's no need or reason to add liquidity risk to that cauldron.

How Can I Finance a BRRRR as a Soon-to-Be College Graduate With Limited Money?

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