Refinancing in Spain (BRRRR?)

[Robert Downs]

Hello BP community!

This is my first post (and first day as an active BP member). First off, I live in Barcelona—actually, Sant Adrià—and I am just starting my education process to begin investing in rental properties, hopefully within a year or two. I am currently reading the BRRRR book by David Greene and this strategy seems very reasonable—at least in the US.

I will be looking in the Barcelona area and want to set an objective of how much capital I should aim to save up (pago y señal o al contado). My basic question is: Can a property purchased in cash be easily refinanced to convert it into a mortgage? Is that a thing here? 

Thanks in advance for your responses.

Robert

[Erwin Groenendijk]

Got back from talking with the mortgage broker. 

In general, the explanation goes like this: difficult because of xyz here in Spain. The mortgage system is different between the US and Spain in that in the US the refinance mortgages are supported by institutional investors - the largest of them being the US government. Here in Spain this is not the case, especially not after the '07/'08 financial crisis. They have no providers of these money lending partners to enable refinancing/BRRRR operations.

This is just a difference in their mindset he says. Because, of you think about it, refinancing a property after renovating could be seen as even more reliable than normally financing a property that still needs work. 

However, the BRRRR method could still be possible in Spain though as explained in the above answers. They would be willing to provide refinancing if you already present a new property that you are planning to buy. The mortgage broker told me that the total LTV of the two properties together could not exceed 60%, which basically means that you will need to keep bringing a significant part in cash.

This gets me thinking what the next loophole could be to still make it work