All Forum Posts by: Eric McCarty

Thank you @James Maradits for the detail. I think it's pretty clear now and I better understand the differences between cash BRRRR strat and financing BRRRR strat. Awesome!

@Michael Doherty I completely agree with every one of your statements and I appreciate the response. I was just confused with David Green recommending to fund the deal with cash (early in his book. I have not read the whole thing yet so maybe that tune changes). I definitely don't want to tie up more money then I have to and financing seems like a good method to prevent that from happening. I didn't want to miss out on something or overlook something when looking at funding 100% my own cash or financing. I've got a deal with a student rental and I've put 20% down on it. It's undervalued and the rent is low, perfect opportunity to BRRRR and then I read to fund 100% cash and said oh crap, what did I miss. Thanks again for the info I greatly appreciate it!

Hey All

I've been doing a lot of research on different investment methods and have mainly been focused on the BRRRR strat. Reading David Green's book, he stresses in the beginning to use cash to fund both the purchase and the rehab. I'm struggling to figure out what the differences are between using all cash, or financing. From what I've read, once you close on a house the seasoning period is usually 4-12 months before you can cash out refinance and it appears that this seasoning period occurs no matter how you've purchased the property; so either way, your cash is tied up for that period. What am I missing? I do understand the hidden costs of not having to deal with the bank, closing faster and cash is more applying to buyers, is that all? Thanks everyone!

@Hayden Wright I have used imagemate.com as a website to see where properties are and who owns them. You can export all of the data to excel and sort by multi family, single family, pet groomer... whatever it is that you’re looking for. Doing it within a state you can then filter by out of state property owners and contact them first. All of that data is public. Good luck!

Just made our first offer for a student rental in Oswego.  Cut a deal with my broker for a place that's been rented for the past 12 years.  Vacant now, but it's in a good neighborhood and is priced below value compared to comps in area.  So far so good!  Hoping that the school year returns in the fall.  If not, we'll flip and sell.

Thanks for the insight Michael!  Are banks or credit unions typically doing these "hard money" loans?  I've talked to a few banks and so far the mortgage consultants aren't familiar with this method.

Thank you very much Bonnie!  That makes a lot of sense.  So I now need to do some research on hard money lenders.  I really appreciate the insight on this.

Hello All

I have a pretty good grasp on the BRRRR method and how it works (I think). The only thing I don't fully understand is the financing to purchase and rehab the property. I've called several banks and in general, I've been told the same thing:

you only use an FHA loan with a lower down payment (3.5%) if you are living in the property. I do not plan to live in the property so I asked what my other options were. They told me that the only other option to finance with a conventional loan with 15% down, however you can't roll the rehab into the mortgage. This would mean that I would need to take out a personal loan or come up with the rehab money another way.

The way I've understood the BRRRR method was to purchase the property and roll the rehab up into one loan. Am I correct in this assumption? I know my other options would be to get money from investors or take a home equity loan out but I want to do one loan and then perform a cash out refinance.

Any insight on this would be great. I appreciate it!

Eric M

Thank you both so much for the quick responses.  I greatly appreciate it!  I talked with the broker and we are going to put the offer contingent upon the seller showing proof that the rent is up to date along with providing the rent rolls.  I also plan to speak with each tenant during the home inspection if they are home!  Have a great new years.

I am about to pull the trigger on my first multi-family cash flowing property.  The property is located in New York State and I am nervous due to the moratorium extension through May 1, 2021.  The seller has verbally told me that all renters are up to date with rent.  How can I get better proof then just verbal communication through the seller?  If I was able to see receipts, or bank statements showing that they paid I think I would feel better.  Am I reading too far into this?  Thank you!