Time Factor in BRRRR

[Pablo Davidov]

Initial disclaimer: my knowledge about BRRRR is purely theoretical. Although I have studied the strategy extensively, I have not yet done my first BRRRR deal, and the purpose of this post is to get insights from fellow BP members who have actually done one or several BRRRR deals.

I feel I have a pretty good understanding in general, and how to analyze the numbers, and which numbers need to be reached in order for it to be considered a successful deal. My question has to do with time itself, and I haven't found many videos, podcasts, or articles that discuss the time element. 

The 2 biggest unknowns for me are related to the Rehab and Refi steps. I believe that the Refi may be the easiest to answer, as I have heard a couple of comments that it may take anywhere from 12 to 18 months after purchase to get the loan refinanced due to a practice called "seasoning" by the banks I believe, but correct me if I am wrong. Please let me know what your experience has been as far as how fast you have been able to refinance.

The second time unknown is the Rehab step, which I understand depends highly on the number of repairs, the complexity of the repairs, and size of the property. Regardless of the amount, I have to imagine that it would take anywhere from 1 to 6 months to get it done. During those months, the cash flow will actually be negative. That is the one thing, that I haven't heard being discussed in any of the content I have been studying and the BRRRR calculator doesn't take into account. I understand that in the long run, the investment is more than worth it, but it would nice to have a more accurate way of making projections.

Am I completely off the mark in considering these factors or is it something other BP brothers and sisters have thought of? Any insights would be greatly appreciated. Thanks in advance. 

[Andrew Postell]

@Pablo Davidov I'll tag @Jon Crosby here too since there is so much confusion on this subject but you DO NOT have to face seasoning.  And in most cases we don't face seasoning.  Here's what I mean:

On your BUY step we usually need a loan to BUY & REHAB the property. The loans that do these steps the best will lend you 75% of the ARV of the property. So when you get to the REFINANCE step, you can absolutely, 100% refinance that amount with ZERO seasoning. None. Now, don't get me wrong here....not every bank will follow this. So when we get PREQUALIFIED, before we buy any properties, we ask them if they haves seasoning requirement for refinancing. If they do, then we go to a different lender. I hope this makes sense how I am describing all of this.

And the costs from when the property is empty is called HOLDING COSTS. So yes, calculating your HOLDING COSTS are critically important to a successful BRRRR transaction.

Anyway, I hope this helps in some way.  Feel free to ask anything additional if you need.  Thanks!