Updated over 7 years ago on . Most recent reply
Please help me with BRRRR financing
Hey guys,
My grandfather and his brother were deeded a house by their parents when they passed in the 90’s. My grandfather’s brother lived in the property until he passed away in December 2017. The house is in the probate process and the probate judge just released the house to be sold.
The house was built in 1972 and has not had any major upgrades since it was built and there is a plumbing issue going on. The realtor thinks she can put the house on the market for $140k and sell it as is.
I would like to purchase the property using the BRRRR method.
My current rental is worth $265K. We owe $175K. I would like to use the equity from the rental and use that as a down payment and closing but will also need about $25K for rehab. After repairs the house will be valued at $250K. How can I make this work?
Most Popular Reply
@Vandale Gentry, that doesn't sound like a good BRRRR deal.
For example, if you are buying for $140k and putting $20k into it, that is $160k all in. You want to be able to refinance out $165k so it needs to appraise for $213,333 and for that to cashflow you probably need to get $2k per month or more in rent.