All Forum Posts by: Dylan Bednarz

Wow!! All super helpful, thank you so much.  I really do appreciate all of the feedback. 

Thank you so much Nathan! I was initially under the assumption that you cannot apply for a conventional loan if you are currently in an FHA loan, or that there was a period I must wait until I can apply for a second loan. Not talking about refinancing here, but purchasing a second property.

Hey Hunter,

Glad this helped you as well! I am pretty sure there is an FHA Loan called an FHA 203k, in which you can purchase a rehab property with an FHA loan. Not definite, but that is the strategy I am trying to do as well.

Hi there,

I am sure this has been covered many times but it is pretty tedious sifting through all the posts to find the right one. I am wondering exactly what the qualifications are when trying to obtain an FHA Loan. I know the minimum down payment is 3.5%, but what is an average interest rate? What is the necessary debt-to-income ratio? How many years of employment do you need to show? What is the seasoning period until I can refinance? How long do I need to live there? Can I get a conventional loan while living there? Can I use a private money or hard money lender while having an FHA Loan? And many more questions.

All information possible, would be fantastic! I have tried to read many articles on FHA loans, but I cannot seem to get a clear cut, all-in-one, in-depth explanation.

I should also probably mention that I my goal is to get an FHA Loan and begin my real estate investing journey.

Thank you!

Thank you all SO much for your replies, they helped so much.  I do know I am ahead of myself, but I am trying to ensure that I do not put myself in a bad position to dive deeper into real estate investing by financing my first home incorrectly.  I am trying to figure out the best way to purchase my first house, and start a career in investing in real estate, all at the same time.  Or at least I am attempting to create the path to do so.

Thank you for your quick response Aaron. When you stay sticking with my FHA loan, you mean the trial flip scenario correct? If so, what would be my next best option for financing the purchase of the actual house to flip (house 2) that I mentioned? Is refinancing the initial house an option, or should I look for the best hard-money lender I can find?

Hello everyone,

I am new to BiggerPockets and relatively new to real estate investing in itself (I have been doing a lot of research within the past 4-6 months), but this BRRRR strategy has made its way to the top of my list of ideas to begin my real estate investing. However, I am having a hard time fully grasping the concept. Let me give you some background:

I am looking to purchase my first house, as well as, start a real estate investing journey. I graduated college in May of 2017 and now I work a full time 9-5 (well 7-3:30) job, that I am very happy with, but I have always had an interest and passion in the real estate world and would love to start part-time investing to make some extra cash and increase my yearly salary (as you can imagine I do not have "a lot" of money saved up at this moment). My true interest lies in house flipping, so my initial idea was to get an FHA loan, buy a house in distress, rehab it, then live in it. This would primarily be a test run on how I did as if this was an investment house that I would be flipping. I would treat it exactly as if it were only an investment property, I'd analyze the numbers and see (if I wanted to sell it) how much profit, if any, I would've made. Then I would take the system I used for this house and apply it on another house but using a hard-money loan instead of an FHA (this is with the great assumption that there is no way a bank would give me another loan right after my FHA loan), purchase another house in distress, rehab it, and hopefully flip it for a profit. Upon researching hard-money loans, it appears that the interest on the loan would completely obliterate my profit margin, so I decided to start brainstorming other ideas which is where this BRRRR strategy came into place. I am very very VERY hesitant to renting simply because of the idea of managing tenants, but if the deal and strategy really is that great, then I may have to change my mind.

My idea now is to purchase a two-family/multi-family house in distress (with an FHA loan, unless another more beneficial option is available - which I would love to hear from the readers about), rehab both units, rent one unit and live in another, then "refinance" the property. My misunderstanding is the refinancing aspect, hence it is in quotations. If I refinance my FHA loan, does that mean I am now taking a second loan out or am I replacing the FHA loan? I honestly do not even have any tangible questions to ask in regards to the refinancing aspect because I truly do not understand how this can build growth and help me move forward with investing.

I have read many forum posts, and many articles, in regards to the BRRRR strategy, but none of which go into deep detail with tangible examples. They especially do not go into thorough detail on the refinancing aspect. So, if someone can please first go into deep detail on the BRRRR strategy, and then primarily focus on the refinancing aspect, I would sincerely appreciate it. I would also greatly appreciate the use of an example with some numbers as well.

My apologies for the lengthy post, but I thank you very much in advance for your time, patience, and help.