I found a lender that will loan 80% future ARV. I have to get list of repairs/upgrades, they appraise, them loan 80% of that. It is 12 months interest then converts to a 15-20 year amortization one time close loan. Can someone help me figure out if this would be a good Brrrr loan but just refinancing up front or what. Any Input would be great.
Lender · Boston, MA · Member since 2019 · 417 posts · 150 votes
6y
@Cody Burke in order to analyze the deal we need purchase price, $ amount of rehab, after repair value, and estimated monthly rent once property is rehabbed.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
6y
@Cody Burke it sounds like you are asking if this is a good loan? As far as loans go if a lender can provide 80% of the ARV and close quickly (within 10 days), then that is a DYNAMITE loan for the "BUY" step of the BRRRR method. Their 15-20 year "REFINANCE" step loan is not the greatest. You want to try to target 30 year fixed loans. Don't know if you can qualify for that loan type but that's what we target with the "REFI" step of BRRRR. And we target 30 year fixed because that helps us cash flow better. Hope all of that makes sense.
@Andrew Postell. Thanks Andrew. The lender also uses this for a flip loan himself, so this may definitely be a better loan to use as a flip over rental.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
6y
@Cody Burke usually these types of lenders are ok with just providing that first loan. Ask, won't hurt to find out. If they are willing to do that loan and have you refinance with a different loan, that would be ideal!