Needing Advice From An Experienced BRRRR Investor

[Tony Barwick]

Hi there, I am buying my fourth property and finally have something I can BRRRR. I have a few questions though, because this is my first time BRRRRing. My private lender is a close friend. He wants it to be a very simple process and doesn't want to have to do a bunch of administrative tasks during the purchase and refu, so I want to streamline this as much as possible for him.

1. As I said, I have a private lender/close friend who is lending me the money for purchase and rehab. We have a promissory note and I want to put him in first position to mitigate any risk for him. I don't know what the best next step is, though. Should I advise my lender/friend to wire me all the money directly for the purchase and rehab ($150k). I would then buy the house and do the rehab. Sounds simple enough. Or would you advise him to send the purchase price to the closing company and the rehab money to me? My accountant says is won't be an issue tax-wise if he sends it all to me for me to simply deal with.

2. If we're both on the deed he is in first position, then what happens when I want to refinance next year? Do I take him off before the refi? Does he stay on during the refi process? Do the banks then need more information from him when they see him on the deed but it is I that is refinancing? Is there a way of making sure I mitigate his risk but also have a better experience with the refi? Hope this makes sense.

3. NB: This is a family deal, I'm buying this property from my grandparents for $100k, going to put $50k into it and the ARV will be around $250k. Would you deal with a title company for everything? Would you do a quitclaim deed? Do I put him in first position after I've made the purchase down at the county courthouse? Or do I put him in first position with the title company when purchasing? Do I definitely use a title company for the purchase?

Getting a bit stressed with all the unknowns, and evidently I'm in need of some direction here. Again, my first time BRRRRing a property.

Thanks in advance,

Tony