Brrrr Method ?

[Lee Behr]

Hello Everyone, This is my first post on the forum and I need some advice! I successfully flipped two houses with the intent to purchase the third to flip and rent with my LLC. My goal is to have residual income and my third house was a small stepping stone in that direction. About two months in and near completion of the third, I heard about the Brrrr method. When I finished the house in 2 1/2 months, I immediately went to work and put the for rent sign up and called the bank. I was then heart broken when I found out that you cannot cash out refi for the full amount of 70% of the appraised value, but only what you purchased the home for the duration of six months. I want to move to my next property, but feel lost on what to do next and asking myself is there a better way? I could pull out only $55,000 after closing cost which is not even enough to pay off the $64,000 I owed in debt. ( I paid the $62,000 for the house in cash from the previous two flip properties). Let me break down the numbers: Purchase price $62,000 Rehab Cost $32,000 Family Loan $32,000 ARV $140,000 Rent $1,400 Any help would be greatly appreciated!

[Brent Coombs]

@Lee Behr, six months is not so long to wait, is it? But yes it's true, if you wanted to cash out $100k on rental that only cost you $62k less than six months ago (not including rehab) does seem too ambitious. Mind you, if you had paid all cash, I would have thought you COULD pull out the full $62k plus closing costs under the "delayed financing exception" rule. The fact that you were already financing everything above the first $30k probably squashed that idea.

https://www.fanniemae.com/content/guide/selling/b2...

..."The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs"...

Hey, you're well on your way. Keep looking for deals like that! All the best...