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Updated almost 5 years ago, 12/04/2019
brrr
hello bp.. using the brrr method is one still capped at 4-10 loans when looking for refinancing out?
From what I have read, with conventional loans, yes. But there are other opportunities with private lending and commercial lending.
not only are they capped but after 6 properties with mortgages, Freddie Mac requirements push in and you can only get out the amount you paid plus closing costs. I was told I could get the 70% LTV after 6 months seasoning but the bank just reversed itself and will not loan me as much as I wanted. I'm only getting my purchase price out so I'm stuck at 60% LTV as the appreciation from the renovation added a lot of value. The only way I can unlock the cash is to sell it now.
Find another bank. Keep it small and local, they can offer you more, are more flexible in terms. Call and speak with someone in commercial lending dept, ask if they're portfolio lender. I'm sure you just haven't found the good one yet. Write all your questions down and start making phone calls. Good luck!!
@Bruce Runn Assuming I understood this correct....Listening to podcast 301 unlocked a rather simple in practice but probably controversial avenue for delayed financing. I'm unsure of what your specific strategy is when buying your homes, but Alex on 301 purchases his property in cash, rehabs, and is able to pull all his funding out (including the rehab) through delayed financing. He simply paid for renovations up front at the closing table and updated the HUD to reflect by providing the invoices for the rehab. From what it sounded like, he has a tight relationship with his contract and thus pays the 20-30k expected renovations ahead of time. He also mentioned that you could setup escrow with the title company to disperse the payments overtime as work is complete (probably a PIA though). When he refinances, he shows the HUD, and voila... I suppose it would depend if your title company would be comfortable with those changes during closing. Was a very interesting strategy that I would recommend looking in to. I've never put it into practice.
The post is from over 3 years ago so all of that is out the window. I have opened up so many newer options, those comments are no longer relevant as I've been buying 4-5 properties/year and Brrrr them and either incorporating them into my portfolio using LLC which then don't count against my 10 traditional mortgages, or selling them off. I'm actually selling 5 long term holds to pay off multiple properties to reduce my work load but increase my net income in 2020 so financing options have opened back up as I hold a HELOC/LOC against every property I own as well.
Originally posted by @Bruce Runn:
The post is from over 3 years ago so all of that is out the window. I have opened up so many newer options, those comments are no longer relevant as I've been buying 4-5 properties/year and Brrrr them and either incorporating them into my portfolio using LLC which then don't count against my 10 traditional mortgages, or selling them off. I'm actually selling 5 long term holds to pay off multiple properties to reduce my work load but increase my net income in 2020 so financing options have opened back up as I hold a HELOC/LOC against every property I own as well.
What kinds of loans are you using? Portfolio? Terms? Just curious because debating on going the non-qm or portfolio route... Fannie mae and Freddie mac allows me only 2 deals a year. I know about the delayed financing options and all that.