Financing for BRRRR?

[Michael J Scanlon]

So I understand the full process of the BRRRR method. Buy with cash, fix up, appraise, refinance the cash out.

But the one thing I’m unsure of is how you finance it when you’re done?

If I'm working with partners as part of the deal, do we finance it through an LLC? That's what makes the most sense to me but I've read so many posts about how most banks won't give a residential loan to an LLC. Is it different once you own the property? Or do you get a mortgage that is split up as a tenancy in common or joint tenancy?

[Will Fraser]

Hi @Michael J Scanlon, you are correct about the LLC financing scenario. If you are working with partners who are not your spouse then you are most likely going to want to do the partner deals in an LLC and then you will likely refinance using a commercial loan. These are sometimes called portfolio loans and are loans that the lender keeps on their books, rather than selling to the secondary mortgage market (to investors like Freddie Mac, Fannie Mae, etc).

These loans can be as various as mortgage loan products and you'll be surprised at how well these work for you in your business.