BRRRR Strategy Question

[Jeff Faulkner]

For the BRRRR strategy to work effectively, it seems you need to get all your initial invested money (purchase and rehab cost) back in the re-fi. Which means that you still need to find a really great deal on the front end and be able purchase homes at 60-70% of value. Can someone please confirm this?

[Jon Crosby]

@Jeff Faulkner Yes, you need a lot of capital to turn the BRRRR engine on, but it's usually done via hard money loan to which you hope to renovate and get stabilized as quickly as possible to start the timer on your ability to refinance. Usually lenders require 6 months to a year of ownership before you can refinance it. So you need to make sure you incorporate those hard money costs into your purchase and rehab analysis. And yes for a BRRRR to work you still need to find a smoking deal on the front end...even more so actually because it's the delta between the purchase and ARV that is going to make the magic happen.