Hard Money Loan for BRRRR

[Martene Clarke]

Hello Bigger Pockets Family!

I am looking into my first rental property and wanted to use the BRRR method using a hard money lender to purchase. Does anyone have tips or links to info/resources using this method

[Steven Goldman]

Hi Martene: Fix and hold financing is readily available if you have a qualifying credit score and the deal makes sense. You can expect a HML to provide 75 to 90 percent of the purchase price and 100 percent of the scope of work, not to exceed 70 percent of the ARV. (Determined by your level of experience and credit score) Rates are 8.99 to 12.99 and points. The cash out refinance will be at 75 percent of the after repair value so long as the rent covers the principal interest taxes and insurance by 1.0 or better. Currently Investor cash out rates are at 5.99 for a 10-20 at the bank or 30 years fixed at 7 to 8 if you use a HML.

I suggest you always run your proposed deal by a broker or lender with experience in this are to insure the deal makes sense and you can exit with all or, most of your money. Good luck.