BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Updated over 3 years ago on . Most recent reply
BRRRR - RE market crash before you get to refinance
Hi BPers!
For those who BRRRR or plan to BRRRR, how do you account for the risk associated with a possible real estate market crash during your rehab stage? For instance, if you take out a 100K short term loan (to cover house purchase plus rehab costs) with comp ARVs of 160K, and the ARV drops to 70K because of a crash.
Is there any protection against that potential loss of value? how do you pay off the short term loan, worst case scenario?
best,
kim
Most Popular Reply
Jay Hinrichs
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Jay Hinrichs
#1 All Forums Contributor
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#1 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
what you described only happended once in my 45 years at this and that was 08 GFC meltdown.
the way you protect yourself though is having the cash to cash out the short term lender if things got bad.
the way you protect yourself though is having the cash to cash out the short term lender if things got bad.
- Jay Hinrichs
- Podcast Guest on Show #222
JLH Capital Partners