BRRRR without proof of income?

Question

How would I be able to buy a property initially and cash out refinance using the BRRRR strategy if I cannot prove income? That's the biggest hurdle I'm experiencing in my planning for my cash flow properties at the moment.  I have a decent amount of cash saved but even if I used that to buy a property outright I'm still going to run into the problem of getting my cash back out to reinvest into the next property, correct?  Is there anyway around this?  Creating an LLC and getting a commercial loan instead of trying to get a conventional loan in my personal name?  HELOC? What should my strategy be?

Erik Cabral · Answer

Brian G. yeah, apologies. I figured that was more likely your question. I'm interested in the answer to this as well. Hopefully someone will have a better answer than I did ;)

Brian Garrett · Answer

@Kyle Coleman I have a solid credit score (760-780) but I don't have much borrowing history. I've typically paid cash for most of my purchases. There's gotta be a way to implement the BRRRR strategy for those of us that don't have proof of income.

Kyle Coleman · Answer

Honestly Garrett,

I'm not super sure there is a way to do a refinance without proof of income.  How much risk would the bank put themselves at in order to do that for you? A regular refinance is one thing, but handing you a pile of cash is another. How strong of a borrower are you, does everything else add up?

I feel like  you would have to know someone that is in a position to achieve that, and it might be kind of underhanded.  I dont think the underwriters will be like, no income, no problem on this.

Brian Garrett · Answer

@Erik Cabral No problem I'm just hoping there's a way to still be able to utilize the BRRRR strategy for buy and hold cash flow properties even though I'm unable to show proof of income right now. For my flips I'll just buy them cash since it's a quicker turnaround time on my money and it reduces my holding expenses.  Hopefully somebody can chime in and help clarify for us!

Brian Garrett · Answer

Huh? You lost me there. The cash flow the property is producing has nothing to do with the cash out refinance to pull my money back out of the property to invest in the next one. I think you misunderstood the post perhaps?

Erik Cabral · Answer

@Brian Garrett I'm assuming you're referring to the cashflow from the rent you'll be receiving from your BRRRR to reinvest into the next property? This technically is "income" but probably not enough to justify a refinance. From my understanding the "refinance" part of the BRRRR strategy is key. I've included a link to a webinar that speaks in detail about this strategy. You may need a Pro account to access this though...

https://www.biggerpockets.com/proreplay/194-how-to...