Should I even try to BRRRR???

[Nik Lee]

Hi all of BP,

A newbie here. I had spent the last few months learning RE strategies and thought BRRRR would be a great strategy for me. I had spent the last month or so building relationships local hard money lenders, banks, and RE agents. I had an LLC set up along with being pre approve. Now COVID 19 is in full swing which kind of halted my decision of using the BRRRR strategy.

So my question to the more season investors is should I even try to attempt a BRRRR given the market conditions and risk the possibility of losing money if the market declines too much? Do you see bank lenders even give out options of refi in the next six months?

Thank you all

[Brian Nichols]

Non-QM lending is basically paused at the moment. Conventional loans / refi's are still flowing and I suspect the fed will do everything it can to keep that the case. I would say the biggest risk for a BRRRR right now is that if prices go down and/or lending changes after your seasoning period, your cash out could change significantly. Oh, and cash reserves as well... tenant demand may be low and quality tenants may be hard to find if things continue to get worse.