Initial financing for the BRRRR strategy.

[Kip Samuels]

Hello fellow Investors,

I currently own a duplex and have a 4 family under contract looking to close mid July.
I've worked hard to save up the down payment for both properties over time.

I've been wanting to execute the BRRRR strategy for some time now and apart from Hard Money lenders,
it's been difficult to find financing for the initial all cash purchase. I currently have about 40k saved 800 plus credit score
and I'm already preapproved for a good amount for the cashout refinance.

Has or is anyone else in a similiar position and how did you go about finding investors private money or building a partnership.
I've been to several meetups and seminars, however I feel as if I'm always being sold something. I've also found people that say they are on board but it becomes difficult to get in contact with them overtime.

Just looking for advice on how or where to find financing for the initial all cash purchase in the BRRRR strategy.

Any reply is helpful , thanks for your time

Best Regards,

Kip Samuels

[Benjamin Seibert]

Hey Kip, you don't necessarily need to purchase a property with all cash to go through with the BRRRR method. I am currently going through this process now with conventional financing. I am purchasing a SFH with 20% down as a rental. I am going to rehab it and rent it out and then refinance to get my cash back that I've put into the property. I performed all of the calculations beforehand to make sure I could pull all (or at least most) of my money out after. An example of the numbers are as follows:

Purchase Price: $100k

ARV: $167k

Down Payment: $20k

Renovations: $10k

Closing Costs: $5k

$167k (ARV) * .70 (assumed LTV I can take out after refinancing - this should be conservative) = $117k

$117k - $80k (amount left on loan after down payment) = $37k (total amount received after refinancing)

 $37k > ($20k + $10k + $5k) (my total out of pocket expenses)

I did leave any fees from the refinancing out of this but it may be included in the total out of pocket expenses portion. I hope this helps provide an example of what I did and answers a portion of your question.