Getting a loan for BRRRR Method

[Eric McCarty]

Hello All

I have a pretty good grasp on the BRRRR method and how it works (I think). The only thing I don't fully understand is the financing to purchase and rehab the property. I've called several banks and in general, I've been told the same thing:

you only use an FHA loan with a lower down payment (3.5%) if you are living in the property. I do not plan to live in the property so I asked what my other options were. They told me that the only other option to finance with a conventional loan with 15% down, however you can't roll the rehab into the mortgage. This would mean that I would need to take out a personal loan or come up with the rehab money another way.

The way I've understood the BRRRR method was to purchase the property and roll the rehab up into one loan. Am I correct in this assumption? I know my other options would be to get money from investors or take a home equity loan out but I want to do one loan and then perform a cash out refinance.

Any insight on this would be great. I appreciate it!

Eric M