Transitioning a residential deal from a short-term rehab bridge loan into a long-term DSCR loan is the core engine of the BRRRR strategy, but appraisal and seasoning gaps can quickly lock up investor equity.
A few common friction points happening right now on the residential refi side:
⏳ Seasoning Period Misalignments: Not planning for 3 to 6-month lender seasoning requirements when attempting to cash out based on the new appraised ARV rather than purchase price plus rehab cost.
📄 Lease & Deposit Documentation: Wrapping up a rehab and placing a tenant, but lacking the required 12-month formal lease agreement, bank deposit verification, or proof of first month’s rent/security deposit for underwriting.
📊 Scope-of-Work Appraisal Gaps: Expecting the refi appraiser to hit peak ARV without providing a itemized list of capital improvements made during the rehab phase.
How are BRRRR investors currently managing holding cost buffers while waiting out seasoning periods and appraisal turnarounds?