All Forum Posts by: Paul Sterman

Hi,

Yes that makes it much easier!

Thanks!
Paul

Hi.

I think you need to get back the purchase price plus your extra costs to cash-out. So I think you need your 75% refi to come to around $385,000 to pay off the remaining loan, your down payment and your extra costs.
That would be about $385,000 x 1.34 = ARV of about $516,000. (so 75% refi of ARV of $516,000 would b the $385,000 cash you need to cash out right away).

Brandon Turner said something like "Why would I buy a house for 80,000 and put in 20,000 if the ARV is 100,000? I can just buy the same house for 100,000 and not do any of the work".

If your refi is only $300,000 then there is still $80,000 invested.

I am new to this, but this is my understanding.
Paul

Hi,

I would find it very helpful to figure out what ARV I would need in order to cash out a BRRRR.

Is this the correct calculation or am I missing something (assuming refi at 80% of ARV):

NEEDED ARV = (purchase price + rehab costs) X 1.25

Is that the correct calculation to figure out if I would get my down payment (included in the purchase price) and my rehab costs back? Or am I missing something?

Thanks!

Hi,

Does anyone know for certain if the BP BRRRR calculator factors in the tax benefit?
I cannot seem to find the information (I have asked Bigger pockets but have not received a reply).

Thanks!
Paul

Hi. I have a similar question because there seems to be something off with either the calculators or the way I use them. I keep finding the cashflow to be similar whether it is a single family home or a multi. So it keeps coming up that I am better off buying 2 single family homes than I am buying one duplex (for the same total purchase price), which to me makes little sense to me. Thanks.

Outside of the equity, isn't the goal to get all of your invested money "out"?

Otherwise you just bought a house and have no real profit. I mean what's the point of positive cash flow if you already had the cash before you started? Maybe I am not understanding this entire BRRRR concept (although fortunately for you, you should get your 10,000 back in about a year or two if you get everything the bank will give you, but I see people do this where there money will be in the house for 15-20 years before they just break even - but I presume these were just bad investments).

Hi,

It seems that most people use "hard money lenders" or "cash" to acquire BRRRR properties.

Is there a problem with using a traditional interest-only mortgage? The mortgage calculator I have uses regular mortgage by defaut, but I am confused because I don't usually see people using a regular interest-only bank loan to buy the property.

Is there a disadvantage or major problem with using regular bank financing to buy a BRRRR property?

Thanks!
Paul

Hi all.

I am looking into the BRRRR strategy and have found some properties that I may be able to buy for a bargain and apply the BRRRR to pull out my down payment (and hopefully my rehab costs).

My wife is daunted by the idea of doing a rehab since we have zero experience and she would rather just try to buy the house, do basic clean-up and then rent it out.

The difference here would be that my money is stuck in the house for 15-30 years and I would not be able to "repeat" the process for very many houses.

How can I convince her that the benefits of the BRRRR method is worth the risk and pain of the rehab?

Thanks!
Paul

 Hi Jaysen.

I was told that if I had not made payments that amounted up to 20% equity of the new appraised value that I could not refinance.  He said that would take at least two years.

This is my 1st attempt. I thought using a banker that another investor uses for BRRRR would make sense, but seems like I need to look elsewhere.

Thanks!
Paul

Hi,

My local bank said they will not refinance a BRRRR without me leaving 20% hard money in the property even if my improvements increase the assessed value by more than 20%. Seems to paralyze the BRRRR method.

Can anyone suggest a bank that will allow me to cash out on the BRRRR? Looking in North Carolina (if that matters).

Thanks!
Paul