Updated about 7 years ago on . Most recent reply
BRRR Strategy Question - Pulling Credit
Hello everyone! New investor here and interested in putting the BRRR strategy to work. I have some potential private money access and would love to dive into my first property using private money, the refinancing to pay that loan back. Obviously, the idea would be to save enough capital to do a cash deal myself so that I can fully re-invest without having to pay a lender back.
My question: How does doing all of that refinancing effect your credit? Does anyone find it difficult to do multiple deals a year since a bank would likely pull hard credit each time you want to cash-out refinance? I may be missing something here, or overthinking but any advice on that topic would be greatly appreciated!
Most Popular Reply
@Judson Thornton Tucker JR Each lender is going to have their own requirements. Some may not pull credit at all but limit leverage; some are credit conscious - better credit better rate; and others will 100% require credit and hard pull each time. With that said, there is not a clear answer regarding how it effects your credit with each refinance.
I would recommend trying to find a lender who is willing to partner with you so they can get comfortable with soft-pulls as long as your payment history has been consistent. I would also recommend working with an investor friendly private lender since those loans would be 'business purpose' and can be issued to an LLC therefore not reflected on you personal credit/debt. This is a huge value add if your long term strategy for debt is a conventional lender.