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Updated about 6 years ago, 11/08/2018
First deal done, now I'm having the second deal slump
I just bought my first 4-plex in Cheyenne, Wyoming using a VA Loan with 0 money down. I want to get more multi unit houses, but I do not have the money to put down. Any suggestions for ways to get creative financing on my next deal? I'd like to try doing a brrrr with a 4-plex in the area, but I do not quite understand how to brrrr if I finance rather than have cash.
Hey @Joey Samudio, welcome to BP. The way a BRRR would work is as described above. The problem with you doing it is that you paid $0 down using VA. Even if you fix it up refinance your next loan will have a 25% down payment. In other words even if you increased your $200K property to be worth $250K you would still only get 80% of the value financed, so you could finance $187,500 is all. It is hard to BRRR with a VA loan as your original loan due to the 0% down.
I am up north from you. Wish I had the market you guys have, things are pretty flat here. I was pretty happy all of my houses here were full, and apartments. I had one empty apartment in a neighboring town empty is all. Had 3 tenants buy a house and move out this month and not one single bite on 3 pretty nice houses with decent yards. I may have to eat the utilities and no rent until it warms up in about April or May. November through February here is tough to rent. I am also finding that renters are not staying nearly as long as they used to. Tough economy here.
Thanks for the explanation @Mike Dorneman! @Jerry W. yes I'm lucky to be down here in this market, I'd imagine the rest of the state besides Jackson and Sheridan have the same problem as you.