Hard Money Terms for BRRRR Strategy

[Brandon Caldwell]

I recently completed my first flip with a hard money lender. I put in about $25k and scheduled to close in a few weeks with profit of about $30k. Essentially I'll have a little over $50k for my next project in which I've been thinking a lot about using the BRRRR strategy.

I'll set up a scenario: I find a foreclosure at action for $140k with an ARV of $245k after $30k in repairs. My HML would likely want around $25k of my own money into the deal.

For the refinancing part: From what I'm hearing, most lenders cap at 70% LTV which would give me roughly $170k for a refinance after the 6 month seasoning period. Ideally, I would like to have enough money ($25k or more) left over to jump into another deal once this project is complete.

What kind of initial loan terms would be generally acceptable from a HML for the purposes of a BRRRR? My current HML for the flip was a 6 month loan. I would most likely need longer terms for BRRRR and just want to have some real life numbers from some of you who have done these deals to know what makes the most sense when I walk up to the negotiating table.

Also, I live in Delaware if that helps.

Thank you for any help you can provide!

-Brandon