BRRR concept --start with 203K loan and re-fi to conventional
The 203k seems like it fits, but i can only have 1 FHA loan at a time (i think), which means i have to refinance and convert this 203k FHA to a conventional loan. I think this strategy will allow me to build my multifamily business, does that make sense?
The only thing is that when i refinance into conventional loans means i have to put 20% down, correct and have PMI? Isn't 20% to much to put down on a deal? this would allow me to work alone and not need any private money, for now.
Most Popular Reply
Hi, @Joe Prew. If you're house-hacking / BRRRRing the property, you should have 20% equity by the time you do a conventional refi. You're not "putting it down," you're creating equity through the BRRRR process. Remember, with an FHA you have to live in the property for at least a year.
With 20% equity you won't need PMI. With an FHA loan you'll have PMI for the life of the loan, even after you reach 20% equity. That's another great reason to refi out of the FHA.
Let us know if you have any other questions.