Impact of Credit Score on Refinancing with BRRRR

[Zack Thiesen]

I have a property in California I've owned for 3 years currently in the sale process and looking to net around 120k after closing costs. I am younger and a carpenter by trade looking to get into BRRRR'ing out of state. I anticipate hitting issues with the refinancing aspect as my credit leaves something to be desired. I guess a better question might be (without getting too personal about my credit score), what is a minimum or appropriate score to have for refinance in order to not get laughed out of the office of your local community bank lol

If I purchase a property completely for say $60k, then another for $20k and put the rest of the money into it in rehab, could I refinance with the property I own outright as collateral? What are better strategies to begin? Buy a collateral property, then buy a fixer that is owner financed with $2k down and go from there?

Thanks

[Elise Marquette]

@Zack Thiesen I would recommend not going to a local community bank. Banks tend to be a lot pickier on credit scores than other lenders and have higher interest rates. General rules of thumb are to make sure that your utilization rates on trade lines are less than 50%. Less than 30% is ideal. And of course, late payments don’t help (again, these are just general issues I see a lot when looking at credit reports). Depending on your situation, maybe consider charging your monthly expenses to a credit card and then paying it off every month