Good afternoon. I have my eye on and property in Texas. Details are below:
3bd 3bth 2k Sq ft
Bank Asking : 129k (it's an REO)
ARV : 155-160k
I'm thinking of offering $100K which would put me all in at $110k.
Its a buy and hold. Rents are $1250.
I'm using a conventional loan.
What are your thoughts.
One other question I have is whether I can use the BRRR strategy using a conventional loan for initial aquisition. Anybody have experience with this?
If you buy with a conventional loan going in, you won't need to refinance it. You already have a loan in place.
The terms you get with an initial purchase should be the same, if not better, as with the refinance. Unless you're doing it to pull out the $10k in repairs you put in if you get a higher appraisal? It doesn't seem worth all the extra closing costs to me...
I would be looking to recoup my down payment and the closing costs for the first loan.
In order to recoup the initial investment, would it be wiser to use hard money or private money versus the conventional loan? I would like to ensure that I can repeat this process once I have a tenant in place.
I think the reason people use hard money for the acquisition in a BRRRR strategy is because it requires less down payment up front than a conventional loan, and it provides funds for the rehab.
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