BRRRR Financing Question for Newbie

[Ashley Wynn]

Hello all!

My husband and I are planning to start our REI journey soon. We've been reading tons of books, BP blogs/forums, and listening to tons of podcasts to educate ourselves about the business. We've also joined our local real estate organization which has been helpful as well. So, we've managed to narrow down our investment strategy to BRRRR investments. Want to start off with multifamily units (2-4 units) then upgrade to larger properties like Monopoly. The strategies in Brandon's book 7 Years to 7 Figure Wealth inspired us to go that route. So in essence, we're looking for cash flowing properties that also works as rentals. The one thing we can't seem to figure out is the financing portion. For those that don't have much capital to buy in cash, are you using private lenders? How do you analyze the cash flow for both phases of the process (when paying interest only payments towards private lenders then once the loan is refinanced)? We've used the BP calculators for some properties we've analyzed but find ourselves stuck regarding the financing. Anyone successful with using private lenders for the purchase and rehab costs of properties then refinancing using a conventional bank lender? With using private lender companies, is that seen as a cash buy? Any tips? Thanks in advance!!