Refinancing in brrrr method

[Travis M.]

I feel like I can not find relevant information on this all important step in the brrrr method. Who is repeatedly lending on these newly renovated and rented properties? Are they making me wait 6-12 months? Even if I buy cash? Are they giving me 40 50 60 loans or do I need to keep finding new lenders once a bank decides they had enough exposure to my company. (working in New Jersey)

[Andrew Postell]

@Travis M. to answer your questions directly you should likely be using a smaller lender to do the "refinance" step.  This is a standard strategy that investors use and yes, lots of lenders can help...but lots will NOT be able to help...or if they do, they will have restrictions...like waiting 6 months.  Generally, the larger the bank the more the restrictions.  So large, national, publicly traded banks are out.  They have too many restrictions.  So how do you know if your lender is flexible enough to help?  I created a list of 8 questions to ask your lender to see if they are good for investors (below) and you can even post in the New Jersey forum to see what local people are using for banks too.  Likewise, I created an entire post on how to properly structure your deal if you purchased with cash.  You can read the post HERE  Hope this helps!

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. When do you start using “After Repair Value” on my property?
3. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance)
4. What is my minimum down payment required? (if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
5. Can I change title to my LLC?
6. Do you sell your mortgages?
7. What is your loan minimum?
8. Can you explain to me what your reserve requirements are?