Newbie questions on BRRRR

[David Sisson]

So, I'm gearing up for my first BRRRR - IE: working on getting some $ together, and searching for potential homes. Ideally, I'd like a 2 - 4 family.

I'm having some problems wrapping my head around a few of the BRRRR concepts and hoping someone can help.

1) Wondering how to finance the property initially. Cash is out of the question, but I can probably come up with 20%. I think this means I'll need hard money. Is this correct, or are there other options? 

2) I'm worried about hard money, mainly that I won't be able to rehab and rent before the hard money loan is done. I know you can get 12 month hard money loans, but what other options do I have? I don't want to lose the house if I can't rehab, rent, and refinance quick enough. 

3) I'm also not sure how to work out the math. The 70% rule makes a lot of sense to me, but I'm not finding properties that are cheap enough. I have a fairly good idea what rehab can cost, and what the holding costs would be, but the properties all seem to cost more than 70% of ARV + rehab costs.

Here's an example: a local 3 family - in horrible condition - needing all systems, gut renovation - roof, windows, siding, can cost less than $100K, let's say $70K. These are hard to find, but sometimes available on the MLS. I figure rehab will cost something like $50K per unit (including electrical, heat, plumbing, finishes, etc) and the exterior will be another $50k. This means a rehab cost of $200k, for an all-in of $270K. The ARV is right about $270K, because these homes are not in great neighborhoods. It'd need to hit $360 - $385K for the all-in to be 70 or 75% of ARV. These neighborhoods don't support those prices.

Honestly, a lot of these homes cost much more than $70K.

This one issue has been a huge stumbling block for me. Hoping someone can help. I imagine that potential answers would be:

1) Buy the home cheaper

2) Spend less on renovation

3) Get a better grip on the ARV - maybe it's higher than I think.

Help?