BRRR strategy questions

[Julio R Gonzalez]

Hi BP, I am new to REI and I am building knowledge on all strategies (pros and cons) to determine which one is best for my current situation. This is specific to the BRRR strategy.

Say I find a multi family property that I want to fix to then rent (BRRR).
- I take a hard money loan ($100k) to cover the purchase of the property and repairs cost (don’t worry about the loan details)

- I rehab the property and it's up to market say $200K (ARV).

- Say the hard money loan was for 8months and by month 6 I have all ready (fixed)

- Now is time to refinance the property (for a longer, lower payment)...

1. Do I need to put 20% down for the loan or will the equity of the home help there?  

2. Will the loan be for the appraisal value (assuming the appraisal was for $200K) or is it for a portion of that (50%)?

3. Does the conventional lender have all the requirements they do for a conventional loan (like having enough assets, having a low debt to income ratio, good credit....)?

4. How will having a $100k loan with high interest affect your opportunity to refi?

These are the first few questions I have for now. The main purpose of this post trend is to understand the BRRR strategy and determine if it works for me (and a secondary purpose is to have other newbies learn)

Thanks 

JR Gonzalez

ME

Keywords: hardmoney, newbie, Texas, BRRR, conventional, Multifamily