Financing My First Brrrr Deal
I’m working with three partners on our first brrrr. We were doing some homework on financing when a great deal fell into our lap. We decided to make an offer on a 4/3 single family. After a few counters, the offer was accepted and we are under contract as of this morning. We have enough cash between the four of us to put 25% down and still have enough to complete the $25,000-$30,000 in expected repairs.
Financing is our issue. At face value, the house is in decent shape. It definitely needs one bathroom reno and a water heater to be livable. There is probably more, but we won’t know until the inspection in two days. That said, what are our financing options? Is conventional financing out of the question? We’re considering a commercial loan and hard money as well. Our offer only states that we need to apply for a loan in the first 7 days after ratification and we have a 45 day close.
Any pointers would be greatly appreciated!
Most Popular Reply
@Ben Hutto I would buy it with a commercial loan in an llc unless you have a way to structure it in one persons name to do conventional on the backend. I apologize but I don’t have experience burrring in a partnership. Find 3 small local bankers and be honest with them on what you’re trying to do with the property. What I usually do is put down 20% on the purchase and fund the rehab out of pocket and refinance on the backend with a mortgage broker. You could probably get some recommendations on BP or I could give you a contact, but you may want to set it up with your backend finance guy too. The thing to look out for is the 6 month holding period. You may want to write that 30k into the closing docs if your title person will let you and you trust your contractor. It would make it easier to refi all of your money out faster. Sorry to write this in a Rush bedtime. Good luck