BRRRR strategy

[Silas Johnson]

Ola All,

I have a question regarding the BRRRR strategy. If you were to go and refi, lets say with a portfolio lender, what type of loan is it? Is it a mortgage or a commercial loan? Is there a limit on the amount of mortgages you can have using this strategy? I listened to podcast 121 and it sounded like this is the strategy they use (hard money converted to bank loan) but many times over. How does this work?

[Heather DeGeorge]

@Silas Johnson - for many of the reasons @Joe Villeneuve mentions, we carry the loans individually on the individual properties. We have friends that own several properties where the loan amounts are under $50k and they have done a portfolio/blanket mortgage because there was no other way to refi them (they actually bought some of them on credit cards!) And 75% LTV isn't just safe, it's required for the investment property refi loans we've done so far. We haven't gotten to hard money loans yet and frankly when refinancing, they care about YOUR income (which would include the rent on that property) and your loan expenses... not much else. I show all the same things I would if I were buying a primary residence plus the current leases.

@Matt Fish is spot on: talk to lenders/brokers now and know who can do what for you.  It can take a while before you will find some relationships you can count on (where you know that if they tell you the loan will go, it actually does) but start building the inroads now and have multiple places to turn to when you have a deal.