All Forum Posts by: Steven Goldman

@Jared C. As a lender we have financed numerous BRRRR deals both for the bridge money and the cash out. As an investor I have executed on a number of BRRRR properties. @ Nicholas L correctly assess the risks of starting out by BRRRRing your first property. Let me point out some strategies to minimize the risk. Your first BRRRR should not be a full gut rehab. While it takes patience and time you can find a under valued property from an estate, foreclosure or prior sheriff sale and keep the purchase price down. Obviously you can not do that in Florida or California unless you are in the rural areas which are frowned upon by lenders. Purchase prices in Philadelphia can be as low as $110,000 with 40k rehab and 220k ARV. That is a good starter project.

You will never move forward if you are paralyzed by fear of biting off more than you can chew. My first rehab was 65k purchase price(Short Sale) 78k rehab and 225K sale price. We made 45k and did not hold it. It would have refinanced at 155k and we would have left 10k behind. For a cash flowing property that is a small investment. Good luck. Message me if you want more information. 

@Anthony Jones If you are trying to refinance with a traditional government insured loan you need two years tax returns. If, you utilize a debt service coverage loan you will not need your tax returns. Just proof of funds on hand to pay the costs. The maximum cash out refinance will be 75 percent of the ARV not to exceed 1.0 debt service coverage based on the rent. So if you are collecting $2100.00 in rent and the monthly payment including taxes and insurance on the cash out refinance is $2000.00 no problem. The DSCR loan is based on your credit score and other factors not associated with your income, only the properties income. Many lenders have a seasoning period. As little as 3 months of as much as 6 months to 1 year.

A good broker or originator should be able to do a deal analysis based on the purchase price and the rehab to advise you of the approximate cash out after rehab and rental prior to your offer on the property. I advise you us a broker who provides both fix and hold and cash out products. Good luck. 

@Mike Romano If you are acquiring a property that needs rehab than you need to use a fix and flip lender, your own cash or a private lender. In the current economic situation there are fewer options for inexperienced rehabbers to obtain funding. If you lack experience we recommend that you find a contractor or experienced rehabber to join your LLC in order to qualify for funding. Good luck.

@Perry L.     Every deal is unique and stands on its own merits. Are you buying at a deep discount because it is a mortgage foreclosure or sheriff sale? Are you making significant improvements? Or, are you buying low and want to refinance at a significantly greater value. You may not need a seasoning period  if, you are buying in cash and, then want to refinance your cash out at the value of your purchase. 0therwise, the challenge is simple; How does the lender justify cashing you out for a value significantly greater than you paid for it? It could lead to collusion between buyers and sellers to avoid down payment requirements. Good luck.

Unless you find the property at a distress sale it will surely require much more than a $30,000.00 rehab.  Good lcuk,

@Babatunde Onadele Jr In order to get a realistic answer to your question the reader needs to know is this a fix and flip or a BRRRR rental. Rental kitchens using lower grade materials can be competed for much less that a full moderate grade kitchen for a resale. Once you know the sq. feet and the strategy, you can go to Ikea and use their program to determine the approximate costs of materials or their installation. Bathrooms are more fundamental. You can go to Home Depot or Lowes and price out the fixtures and cabinets and faucets. You need to do the footwork. If you are a buy local your lumber contractor or supply outlet can do the same. That would be a better way to figure your costs out, Good luck.

@Jordan Henn I have always been fascinated with all things real estate. The question "Is BRRRR Right for me? Is the wrong approach. I have learned that to successfully execute in real estate investing you have to find off market or good deals and then tailor your strategy to the best return on that property. So, if the property is a strong fix and flip, the margin is large enough, I would fix and flip it. If the property has a strong D.S.C.R. and a good N.O.I. I would BRRRR it.

Sometimes, I would be looking for a BRRRR and instead find a good flip and vice versa. The toughest task in real estate is finding good properties! Good luck.

Hi Corey, Well if you know the return at a project level then you can apply the fractional shares and determine what the return would be for the individual partners. Make sense? 

@Jay Ben It depends on what type of zoning issue you are trying to understand. You can always obtain the zoning code many of them are online and read the zoning regulation pertaining to the property. The permitted uses are always clearly spelled out. Anything not permitted will require zoning relief in the nature of a variance or rezoning. For instance if you want to turn a SFH into a multi family you will not be able to convert the SFH in to a multi. If multi family is not permitted in the location of the property. I always talk to the neighbors. Even if a multi-family is a conditional use, one which requires a zoning hearing prior to being permitted, if the neighbor are dead set against it then its not worth the trouble. We wish you luck.

Hi Shelia, if you already have some connection with the Hartford market and you want to invest in that market I suggest you find the meet ups and the REI groups and participate in the discussions. In reality only areas with high crime are a no go. In my experience I have witnessed and experienced people hitting home runs in areas I would not dare to work in and I know of failures where failing is almost impossible. It is all in the buying so if you can find a great deal than it is a great deal. I do nto think the geography is the issue.