Questions about Brrrr -Refinancing & possibility of live in brrrr

[Daniel Ahn]

Hi, I finished my first run of the brrrr book and I could use some clarity on some parts of the strategy.

1. What does the refinance portion look like of the brrrr strategy?

1. Do you now need a down payment because you are now taking a loan out against your property? Or is the fact that you are leaving 25% in the property (assuming ltv is 75%) like a "down payment"

2. When you refinance a loan, will it typically be refinanced as a "conventional loan"? Or is pulling out the equity from your property and paying down the mortgage a different type of loan? 

3. I'm currently living in an apartment what my wife (in California). Does the brrrr strategy work if I live in my first brrrr property and then refinance/repeat and rent out my second brrrr property?

4. I'm also considering long-distance investing just because the cost of Cali (and the county I live in) is high. I know there are pros and cons to long-distance and a lot of it has to do with risk tolerance/research. I'm wondering if long-distance investing is a better option for someone in my position. I would love any insights and opinions on this matter. 

Thanks for reading this possibly confusing post. I'm just trying to learn and grow!

[Andrew Postell]

@Daniel Ahn oh yes!  I actually do have a list of questions I would recommend to ask any lender that you are interviewing:

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. When do you start using “After Repair Value” on my property?
3. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance)
4. What is my minimum down payment required? (if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
5. How many loans can I have with you?
6. Can I change title to my LLC?
7. Do you sell your mortgages?
8. What is your loan minimum?
9. Can you explain to me what your reserve requirements are?

Thanks!