Purchase all cash, refi, repeat. Would that work?

[Justin Young]

Aloha BP!

Exactly as my title states, if I were to purchase a property all cash, then wait for the seasoning period (if there is any), and purchase the next property, are there any setbacks to this? There are a few things I would need to account for such as refinance costs, making sure the property still cash flows, the amount of the refi LTV and if that's enough for the next property. Are there any other downfalls to this strategy? Is this strategy used commonly or am I just heading in the wrong direction? Thanks in advance. ALOHA!

[Christian Bors]

just to clarify since I don't think any one has truly answered the question above. Using the BRRRR strategy on TK is very unlikely and somewhat silly. If you buy a tk, you will not have enough equity in the property withdraw funds. The TK provider wouldn't leave that much meat on the bone. Second, why would you use cash on a TK if you intend to refi in 6 months. Just get a loan up front. Why would you want to pay closing costs twice?

Also, 6 month seasoning is a very common practice on the residential side. Many banks will require 12 months! If you refi through a commercial lender, most will not care about a seasoning period.