All Forum Posts by: Andrew Garcia

Hi @April L., since this is your first BRRRR, most lenders with fix and flip programs or HMLs will lend up to 85% of the purchase price + repairs. Therefore, you will already have the equity when you go to cash-out.

If you follow the 70% - repairs as the MAO, let me give you an example.

$230k ARV. $161k - $31k in repairs. MAO is $130k.

You would only need $24k in down payment. There will still be closing costs and fees but you would still have $10k left for a rainy day.

Then, once you refinance, you will pull out 75% of the value for a $172,000 value. After paying off the fix and flip loan and carrying costs, you put the $24k down payment back in your pocket to use on the next deal.

Hope this helps! Let me know if I can be of any assistance.

Hi @Christopher Oliva, the issue with a HELOC is that they are generally variable rates. However, they offer the best rates. I would do a HELOC then 6 months later, once the rehab is complete and the appraised value is higher, cash-out refinance into a 30-year fixed-rate loan and pay off the HELOC.

Hope this helps! Let me know if I can be of any assistance.

Hi @James Brewer,

When you refinance, there is no down payment per se.

You will need the appraisal to come in so you can take out enough equity to cover all your costs. Typically, BRRRR investors leave $10-$20k in the deal but that is a lot better than $100-$200k.

Hope that helps! Let me know if I can be of any assistance.

Hi @Ryan Thomas, building costs could very well increase in the next year. Labor and supplies are both in a shortage while building is accelerating. 

Also, liquidity is only a factor if you think prices will decrease in the next year. If you believe so, then you can sell.

Building and renting your current house seems like a solid plan.

Hope this helps! Let me know if I can be of any assistance.

Hi @Britt Smith, if the loan is conventional, then they will not allow you to title the home to your LLC.

That would make the entire principal sum due and payable. 

You would need to refinance into an LLC and transfer the title at closing. You could do this with a DSCR loan where they qualify based on the income of the property, not the income of the LLC or borrower.

Hope this helps! Let me know if I can be of any assistance.

Hi @Gildas Dossa, I would wait until you have some savings prior to investing.

You can start by becoming a real estate agent or wholesaling as a way to get started in real estate.

Hope this helps! Let me know if I can be of any assistance.

Hi @Jason Sung, connect with local wholesalers to find off-market opportunities. 

The list price is not always the sales price. You can also look at homes that have been on the market for 3+ months and make offers on them that would make the numbers work.

Hope this helps! Let me know if I can be of any assistance.

Hi @Becca Lavin, it really depends on the price range.

You are going to have better cashflow on a $200,000 property rather than a $2,000,000 property. Unless you are doing STRs.

Could you be a little more specific on what type, price range, etc. that you are looking at?

Hi @Devonair Jackson, I agree. Definitely go to networking events and meet others in the industry. 

As for pitfalls and mistakes, everyone makes them so when you do, don't beat yourself up too much over them. 

Make sure that you are connecting with others and don't try to do everything at once. Target something specific so you can take action and be knowledgeable. 

If you do that, I have no doubt that you will be successful.

@Joshua Martin, it would be called a cash-out refinance.