BRRRR Strategy - Refinance Requirements

[John Persons]

Hey all! Excited to be here.

So, it seems my concern about the BRRRR method is shared.

-When it comes to this strategy, what sort of requirements must one meet for the bank to consider refinancing the property? Will they look at us directly like a traditional mortgage, or would a bank happily accept a refinance is the property is cash flowing and a winning deal for them?Depends on the institution? 

All help appreciated! Thanks!

[Alex Bekeza]

@John Persons If you're looking for a Fannie/Freddie conventional option (lowest rates) then yes you'll need to prove the ability to repay via your personal DTI. However, there are commercial options for investors that are based solely on DSCR (cash flow) and FICO without even looking at you DTI (no tax returns or pay stubs at all). These rates are higher 4-6% range but you can still secure a 30 year fixed term. These commercial notes also allow LLC vesting if desired, have no cap on the # of properties you have financed so you don't need to worry about hitting a cap, and they typically don't report to the credit bureaus.