All Forum Posts by: Jason Shackleton

Hey @Rudy Munoz 

As stated above, doing a flip and putting cash in your pocket is likely your best bet if you have a bunch of other debts. However to answer your question there are lenders that will look more at the performance of the property than your own personal financial situation. Most of these lenders require a 650 credit score and some go as low as 620. The rates will also be higher than your conventional loan options. Most will also require at least 3 months of property ownership (seasoning) before you can refi with them. ? 6 months of seasoning is more common. So if you do not meet that credit requirement now, sign up with a good credit repair company and meet the requirement in 3-6 months.

Hey @Robin Brown 

Have you ever considered investing in a U.S investment property? The strategy outlined in the book One Rental At A Time that you mentioned would likely be easier to achieve in the U.S. Some food for thought anyways.

Hi @Pat Leri

I have completed two BRRRR deals.

Yes you do actually get the cash in your hands and also yes it is in the form of a loan. Look at it as hypothetically selling the house to yourself at the new property value (ARV) after you have completed the renos.

Lets use your buying in cash example. Let's say you buy a house for 100k cash. Then you renovate it and put 50k into the renovations. At this point you are into the deal for 150K. Now since you have forced up the value of the property lets say the new value is now 200k. You have now added 50k in equity to the property.

A lender now uses that appraisal of 200k to put a new mortgage on the property. Most lenders want you to hold 20% in a rental property on a refinance. That means in this example the lender will have you keep $40,000 in the property. You will then get access to 80% of the property's value in the form of a loan into your bank account. In this example you would get access to $160,000. You owe interest on this $160,000 at whatever interest rate your lender gets for you on this new loan.

So when they say act as if you are selling the property to yourself. Imagine your first self (the purchaser) bought the property for 100k cash and you sold it to your future self (the buyer) for the new value of 200k. Your future self put 40k down and took a 160k mortgage on it.

The above example doesn't include all the fees associated with the process.

A cash out refinance and refinance are mostly used to refer to the same thing. However a refinance actually means breaking the mortgage or doing a mortgage renewal to get a better interest rate whereas a cash out refi means you actually take money out of the deal to use.

I hope this helps clarify the BRRRR method.

Hey @Marian Fine Frueh I know a good lawyer that can help you set up a business entity to own your properties in for asset protection. She has been doing this for real estate investors for over 15 years. 

I am happy to connect you.

@Blake Dennis I know a lender than loans on these commercial deals. This particular lender will allow you to purchase mixed use properties like this inside an LLC.

@Adam Roth I might have a solution for 20% down. 

Hey @Cheryl Alarcon I do not know of a conventional lender that will do this. However there are lenders that will pre-qualify you to buy in most states with slightly higher interest rates.

Hey @Adam Roth I am curious why do you think you need a portfolio lender for a single beach condo?

Hey @Corey Dussault 

Every lender will ask for something a little different. The key is to find a good broker and have them walk you through the multi family financing process.

@Alethia Hines You should find out who the seller is and get it under contract for a fair price either way. Opportunities like this do not come up everyday. You will also want to look into your financing options in case you decide to close on one or both of the properties. 

Good Luck!