Thoughts on BRRRR Strategy from experience??

[Jared C.]

I am looking to start my real estate investing career by the end of this year, or early next year. I have read the BRRRR book, as I am highly interested in this strategy, because it lines up with my investing goals.

My question to any investors employing this strategy is: have you, or could you get a hard money loan to acquire and rehab the property, then cash out refi into a traditional mortgage for the exit strategy, With the ARV of the property allowing the traditional Loan at 75% LTV to pay out more than you started with???

Thank you In advance! 

[Steven Goldman]

@Jared C. As a lender we have financed numerous BRRRR deals both for the bridge money and the cash out. As an investor I have executed on a number of BRRRR properties. @ Nicholas L correctly assess the risks of starting out by BRRRRing your first property. Let me point out some strategies to minimize the risk. Your first BRRRR should not be a full gut rehab. While it takes patience and time you can find a under valued property from an estate, foreclosure or prior sheriff sale and keep the purchase price down. Obviously you can not do that in Florida or California unless you are in the rural areas which are frowned upon by lenders. Purchase prices in Philadelphia can be as low as $110,000 with 40k rehab and 220k ARV. That is a good starter project.

You will never move forward if you are paralyzed by fear of biting off more than you can chew. My first rehab was 65k purchase price(Short Sale) 78k rehab and 225K sale price. We made 45k and did not hold it. It would have refinanced at 155k and we would have left 10k behind. For a cash flowing property that is a small investment. Good luck. Message me if you want more information.