Construction Loan for BRRRR

[Zac El]

I am a very new aspiring real estate investor. I've been on BP for about a week sifting through the site. I'm interested to begin investing utilizing the BRRRR method. I have yet to come across a mention of utilizing a construction loan for the rehab and then refinancing when it's complete or ReFi after some "seasoning." Perhaps it's not possible, I'm not sure but I thought this would be a good risk-free place to pose the question.

[Stephanie P.]

Originally posted by @Zac El:

I am a very new aspiring real estate investor. I've been on BP for about a week sifting through the site. I'm interested to begin investing utilizing the BRRRR method. I have yet to come across a mention of utilizing a construction loan for the rehab and then refinancing when it's complete or ReFi after some "seasoning." Perhaps it's not possible, I'm not sure but I thought this would be a good risk-free place to pose the question.

Welcome to BP

It's a very common way to accumulate properties.  Some people do it with hard money where the rehab is covered at 100% and the acquisition is funded at 90% and below.  It's very important to have a wide spread between where you bought the property and the prevailing value once renovated.  Generally max 70% of the after repair value is the number to shoot for.

Stephanie