How to Finance Purchase with BRRRR Investing?

[Austin Hanse]

If you are doing the BRRRR method, is it recommended to purchase the property initially with a conventional mortgage or to borrow from a hard money lender? Will either one affect how the refinancing process works down the road? For instance, if I purchase a property with a conventional mortgage, will it be harder to refinance this in 6-12 months after the property is repaired and the ARV has increased?

[Andrew Postell]

@Austin Hanse yes, you can absolutely use conventional money in the beginning and the HomeStyle loan even allows for renovations as a part of it.  Most of the time you can't purchase a property with Fannie/Freddie money mainly because they take too long to close.  This is "in general" of course but 99% of the time successful investors target "off market" deals and buy them with a deep discount to renovate.  Often you MUST close quickly because the owner might be facing foreclosure...or a myriad of other problems that are out there.  So often you must use either Hard Money or some other acquisition strategy just because those types can close quickly.  

It certainly is possible to use conventional lending but probably not likely in most successful equations.  Keep asking and we'll keep answering!  Good luck!