BRRRR Strategy question

[Tiffany S.]

From my understanding when using the BRRRR strategy you first buy the home (private lender, HML, Cash) then after the "seasoning period" you can do a cash out refinance with a conventional mortgage. Can you just get a conventional mortgage from the beginning? Rehab...Rent...then Refinance with another conventional mortgage (of course with the higher property value at this point).

[Sean Blomquist]

@Tiffany S. the purpose of using the hard money lender first, is putting less of your money into it from the start. If you do a conventional mortgage from the start, you will be bringing at least 25% down for an investment property. When people use us on this strategy, they may not need to bring any money down (on a good enough deal for our 70% LTV to cover purchase, repairs and closing costs). Then once the rehab is complete, they are able to do a rate and term refi into a long term loan. Our clients use Kim Burke at Leader One to do the refi, since they are direct to Fannie Mae and don't require a seasoning period. This is a great strategy if you can put the pieces in place.

I'm not sure if Leader One is in VA, but you can reach out to @Kim Burke if you have questions about the conventional side.

Good luck!