Delayed Financing Using The BRRRR Method

[Sean Dawson]

Has anyone had any experience using delayed financing for the BRRRR method? What are the pros and cons to this versus a traditional re-finance? I understand there is no seasoning period, but does that mean that you also do not have any equity in the home after the cash is taken back out of the home with delayed financing? Or are you still able to get it re-appraised after the rehab is done and get the LTV ratio that you want with a BRRRR property after it is appraised?

Also, for rehab costs I understand that I need to put that money into some kind of escrow when I purchase the house. Is this correct? Any insights would be greatly appreciated. Thanks! 

[Andrew Postell]

@Sean Dawson there's a whole BRRRR forum that will get you lots of responses to this question. You can certainly leave this here. Based on my experiend with BP, the state forums have good activity. They are mostly for regional types of questions (are log cabins good in this area, who knows a contractor in X town, that sort of thing) but the city forums aren't that active.

Anyway, to answer your question your lender should 100% be using the after repair value.  This is one of the most important questions for us to ask our lenders because some won't...but we need to only work with those that do.  

I wrote 2 posts that I think might be helpful to your questions here - 

• The one on delayed financing (and how to structure your deal better) can be found HERE.
• The one on what questions to ask lenders (and how to find the good ones) can be found HERE.

Let me know if you have any other questions.  Thanks!