Guidance on first BRRRR

[Demetrius Ward]

Hello BiggerPockets family, I am new to Real Estate investing by way of the BRRRR strategy. Like most rookies, I have a YouTube University degree and I've listened to hours of BP podcast. For the most part, I understand the process and what it entails in its various steps. I have a realtor sending me deals daily, I'm in many local Facebook groups in my area and come across deals that way as well. I think I'm stuck in what they call the analysis paralysis stage. I've convinced myself to start after the holidays. If you're still with me here I'm looking for things I should have squared away before even making an offer. I would like to use hard money to finance the deal my credit score is excellent, but I know that isn't everything. I'd be grateful for any kind of advice or information.

[J. Henriquez]

Hi @Demetrius Ward,

When using the BRRRR strategy, here are a few things to consider before putting in an offer.

Financing - You mentioned you want to use hard money. Before putting in an offer you should get preapproved by multiple hard money lenders. This will allow you to shop rates and terms and determine which hard money lender will work best for the deal. It is best if you have them pull your credit within a 30 day period so that it doesn't affect your credit score negatively. 

Rehab - Once you choose a property, you should reach out to a few contractors and have them each walk the property and provide a quote. This will allow you to verify your rehab estimate, which is very important. Also, you now have a contractor ready to go once you close on the property. 

Refinance - I would look into lenders that you will want to refinance with. This will make it easier to do once you are ready to refinance and pull your money back out. Also, you want to see if they require a seasoning period. If you are not ok with a seasoning period because of holding costs or what have you, then you can look at delayed financing. This type of financing is set up ahead of time so you can pretty much skip the seasoning period. 

These are some considerations to account for prior to submitting an offer. Hope this helps! Good luck!