BRRRR Method Further Explanation

[Michael Acevedo]

Hello Everybody!

I am having trouble one on part of the BRRRR Method. In the buying process. Does the property have to be bought cash? And rehab as well? Or can I finance the property through an FHA, live in it, put some sweat equity in, after a year, rent it out for six months then re-finance? Is this still considered a BRRRR? Or will the Loan to Value affect me in the refinance process? And if so, is it possible to bring that loan to value to meet the lenders criteria through the sweat equity I put in? And the year and a half the mortgage was being paid down plus the 5% initial down payment or is there a slim chance of getting that loan to value to refinance using this method?

[Lee Ripma]

@Michael Acevedo

If the property is in good enough shape to get FHA then it's likely not a BRRRR candidate. BRRRR props are highly distressed and bought with cash or hard money. You can add value to a stabilized property and refi but BRRRR usually implies it's done pretty quickly.