I have a BRRRR question. What do you think?

[Mike Leising]

Hi guys, 

A quick question on the BRRRR strategy. Most of the time when I hear about this strategy, at the "Buying" stage, they always suggest to buy a property with cash and then Refinance after the Rehab. Am I missing something or is there any reason I couldn't buy a single family home with a 30 year mortgage during the buying stage, then Rehab, wait a year (or however long) then Refinance?

I realize that most of the time buying in cash is ideal, but is there anything wrong with getting a 30 year mortgage and doing the BRRRR strategy?

Thanks!

Mike

[Brian Garrett]

There are two reasons you often hear about cash purchases in correlation to BRRRR:

1) Often the properties are uninhabitable and don't qualify for conventional Fannie/Freddie financing

2) You would then have two sets of loan costs (purchase and refinance) versus just the refinance portion