How the Heck Are You Doing 5-10 BRRRRs Per Year?!

[Mark J.]

BRRRR works, no doubt. I've completed two but am now stuck waiting three months until I can cash-out refi on my third. So here's my question-- how the heck are all these investors doing it-- BRRRR-ing 5-10 properties per year?!

Since Fannie Mae's seasoning requirement is six-months for a cash-out refi, these investors would need a LOT of capital to continue to acquire properties while they wait for refi funds. For investors like me, who only have the capital to purchase + reno one property at a time, that limits me to two BRRRRs per year (if I do it perfectly). I'm currently looking for additional funding at local banks and credit unions, but with so much money tied up in the current BRRRR, my DTI ratio and credit score have taken a real hit.

SOOOO-- Brilliant investors out there in BP Land-- how are you doing it-- funding multiple BRRRRs simultaneously?! Are you relying on partnerships or, if you're a solo investor like me, how have you built-up your property acquisition fund? Are you using some combination of hard money / HELOCs / PLOCs / credit cards / family & friends / partnerships / flip profits?

Many thanks in advance!

Mark...

[Lane Forhetz]

@Mark J. I invest in SFR in St Louis. I have completed 3 BRRR method rentals in the last 6 months and am working on my 4th (just got it under contract).

The way I do this is through a HML and gap funding lender so that I am $0 out of pocket with a rehab budget as part of the HML. It then takes me about 6-8 weeks to rehab and refinance with a "terms refinance". This is different than a cash-out refinance as I am not getting cash out (though I can get 2% of the loan up to $2k in cash), rather I am refinancing the HML into a 30year fixed rate loan. I end up being about $5-$8k out of pocket after the refinance given a good ARV calculation (the goal is $0 out of pocket, but those are almost impossible to find).

The only caveat to this strategy is that I have to put all these loans and houses in my personal name. After 3 payments though, I quit-claim deed the house to my LLC, then only have the mortgage in my personal name (bank could technically call the loan, but 99.9999% of the time they don't - my bank even told me they wouldn't as long as I was current on payments).

I hope that helps you! Good Luck!