All Forum Posts by: Chris Kendrick

 You can only get what you paid for the property plus closing costs/pre-paids on delayed financing.  So, in your case you could borrow/get back 120k plus closing costs with delayed financing. So you cannot get the 40k in rehab costs back using conventional  delayed financing. 

But, you could do the second option I mentioned above. using a 220k appraised value we would potentially do a short term bridge loan with no pre-payment penalty at 165k, giving you the cash back.  Then turn around to refi into a 30 year fixed conventional loan with no pre-payment penalty right away using the same appraisal.  So, you have your cash back out with no seasoning requirement AND the long term fixed rate. 

 @Chris Kendrick    Then you can still do a conventional loan using delayed financing right now.  Assuming a single family home the constraints for delayed financing is you can borrow up to what you paid for the property plus closing costs/pre-paids up to 75% loan to value.  So, if you paid 100k, and the appraisal is 150k with 5k in closing costs/pre-paids you could borrow 105k max.  This is under 75% of 112,500. If the appraisal was 125k, you could only borrow 93,750.

Lets say the appraisal was much higher like at 200k. At that point it might make sense to utilize a strategy we use all the time which is to get a bridge loan for your cash out to take away the delayed financing restrictions.  In that case we would lend you 150k pulling the cash out up to 75% of the appraisal. We would then refi you into a conventional loan right away using the same appraisal. This gets you around the delayed financing restriction AND the new 12 month seasoning requirement because seasoning ONLY applies to cash out loans.  In this case the conventional loan is NOT cash out.  

 @Chris Kendrick   Did you pay cash for the property?

All properties can cash flow. Using leverage is where it gets more challenging.

But if you bought a $200k single family house cash and rented it out for $1,700 per month, you'll have around $1,300 per month in cash flow after paying taxes, insurance, maintenance. 7.8% return on your money.

The difference between buying a turn key rental property and doing a BRRRR is..

-TURN KEY RENTAL: Buy, rent, repeat

-BRRRR: Buy, rehab, rent, refinance, repeat

If you're up for a remodel then a BRRRR is still a good strategy. It will help you learn how to buy a deal under market value, how to add value through renovations, and how to manage a remodel. But when it comes time to refinance you will probably be disappointed. Values are dropping, and rates are up. This is that part of the BRRRR method that is broken right now.