Taking the big leap....BRRRR

[Allison Winston]

We have found properties that we are interested in using the the BRRRR method but we have some issues....

1.) We don't have the 20% down payment (more like 10-15%) or rehab cost without dipping into 401k.

2.) We're afraid of HML as we're just starting out and doubt want to get burned.

3.) Credit score is great just don't have start up cash for the class of property.

Any and all suggestions welcomed.

[Odie Ayaga]

@Allison Winston you would use the HML for the B, buy, and the R, rehab. You don't combine conventional and HML loans as its two liens on the property and neither will do it. Once you complete the rehab you get it rented and then you would typically go conventional for the refinance.

It's a very tough market for HML loans right now so you'll want to temper your expectations. Before I would say expect to need AT LEAST 30K to get into a hard money purchase, now i might double that. Additionally, some lenders aren't even lending to new investors at this time. It could be good experience just to do some research, get some recommendations and get to know more about the lending market and if you're prepared for taking on these projects in this environment. Best of luck!