Updated about 7 hours ago on . Most recent reply
Looking to do a BRRRR
I have some capital to do a brrrr but need information bout the lending part of the deal and want to know about the point system when it comes down to loans. Want to know if Baltimore is still a feasible place to do a brrrr with a row home. I am looking to hold and refi when the home is complete then move on to the next home. Anybody in the area and or that can provide some information about a brrrr in Baltimore will be great.
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Quick breakdown on the lending side Don:
Most BRRRR investors use hard money or a private lender for the acquisition and rehab, then refi into a DSCR loan or conventional loan once it's stabilized and rented.
On points, a point is 1% of the loan amount paid upfront. Hard money typically runs 2-4 points plus 9-12% interest right now. DSCR refis are usually 1-2 points with rates in the 7-8% range depending on your credit, LTV, and DSCR ratio. Always compare the total cost (points + rate + fees), not just the rate.
On Baltimore row homes, it can still work but the deal has to be right. Watch out for:
Older homes with knob-and-tube, lead paint, and outdated plumbing that blow up rehab budgets
Tax delinquency and ground rents (Baltimore-specific issue)
Pockets where ARVs don't support the all-in cost, you'll get stuck with capital trapped in the deal
Vacancy and tenant quality in weaker blocks
The biggest BRRRR killer is overpaying or underestimating rehab. Hit your 70-75% ARV minus rehab rule and you'll be fine. Miss it and you'll leave money in the deal.
Talk to a few local DSCR lenders before you buy so you know exactly what the refi will look like. That way you're not guessing on the exit.