Newbie BRRRR Question

[Alessandro A.]

I'm a newbie looking to purchase my first investment property. I found a cash-flowing four-plex on the market for $250k. It is fully rented and is getting $2700 in rent. I am approved for a conventional loan. 25% down and closing costs would cost me around 70k. That is most of the savings that I have, which makes me tentative, but I am happy with the cash-flow. My plan is to add a few cosmetic changes, as the property is already good shape, and in 6 months, cash-out refi enough for a down-payment on another property. Is my implementation of the BRRRR strategy a correct one?

[Mike Dorneman]

@Alessandro A. Yes, that can work. You will want to identify a commercial lender that will allow you to refi without “seasoning” the property “waiting” 12-24 months. I use a small local bank in my area and they do not require any seasoning so it works out great on quick cosmetic deals. Also if you can increase rent “execute all new leases” that would be great. The bank is going to loan based off the projected income so the higher the rent, the better the appraisal!