All Forum Posts by: Account Closed

@Vince Arena Thanks for the insights, and congrats on your success!

Hey Ben! Thanks for sharing this story and congrats to Vince! Good to know about the material availability issues, are there any tips for folks getting started to check to make sure they don't end up waiting almost 4 months to wait for furniture?

Hey Kyle - congrats on your successful house hack!

What about doing a BRRRR where you use the 50-60k (or less) as initial capital into the BRRRR deal, and look for a deal where you would be able to easily get your 50-60k cash back on the refi, and possible even more? Then you can do another house hack after because you would have gotten all your capital back from the refi, and then some? Or your can BRRRR a property that would be good for a house hack as well, and move into the house hacked BRRRR after its rehabbed.

Just thinking out loud as there are lots of options, best of luck to whatever you decide!

Originally posted by @Zachary Koran:

@Account Closed Very helpful and makes complete sense regarding getting pre approved for the refi first. I haven't seen too many banks that do both ( maybe it's conflict of interest) but hypothetically let's say your DTI is already at 40-50% going into a deal it seems like it could be difficult refi out? What's a good strategy then? Credit is good and cash reserves are good.

 @Zachary Koran the conventional lenders that I've talked to in my area like to see less than a 49% DTI (including the hard money loan). The lenders (at least the ones I've talked to) only look at the increased difference in the mortgage as a result of the refi. Another big consideration is seasoning requirements. Most, but not all, conventional lenders like to see you own the property for anywhere between 6-12 months before they'll allow you to refi.

Some conventional lenders allow for shorter seasoning, but its critically important to talk to your conventional lender and ask questions to find out what they're requirements are. Also talk to hard money lenders in your area and ask for referrals for lenders that can help with the refi. If you can't find a conventional lender that has favorable BRRRR requirements, another option would be to look into portfolio lenders for the refi.

@Zachary Koran

Some BRRRR deals if good enough wouldn't require a down payment where you would only need to pay for points and interest on the deal, but these can be hard to come by depending on your area. But a key consideration is having cash reserves after the down payment too. The hard money lenders that I've talked to like to see at least six months of interest payments in cash reserves.

Another consideration is to talk with the lender that you'll be refinancing with as well, and refer them to your hard money lender so that you have clear communication all the way through the process. I suggest to get pre-approved for the refinance loan amount before starting the BRRRR given that the hard money loan will alter your debt-to-income ratio to make sure you don't get stuck in the middle of the BRRRR deal.

Sounds like you're on the right track with BRRRR, best of luck and I hope you can score some awesome deals!

Hey Mario, sounds like you've done a great job renovating your current townhouse while saving up and working hard!

Most hard money lenders I've looked at for BRRRR deals like to see at least six months of interest payments in cash reserves after points and other closing costs used for the hard money loan. Another big consideration when doing BRRRR is the chance of not being able to refinance the property after its been rehabbed and rented due to things like too large of a debt-to-income ratio, so be careful of that when looking into refinancing your current townhouse as that would likely increase your debt-to-income ratio.

Some of the best BRRRR deals actually don't require a down payment at all, but you would still need to cover points and other closing costs on the up-front loan and have cash reserves to show the lender you can have some safety in-case things go wrong like underestimated rehab budget or holding costs.

You're doing all the right things, keep up the solid work and good luck!

Hey Joshua, congratulations on the first home purchase and house hack! I am yet to purchase my first home so I'm expecting to have a similar experience to you; exciting stuff! I'm looking into BRRRR deals because when done right, a BRRRR deal will give me the ability to recycle my initial investment over and over into acquiring more and more properties as opposed to having to wait to save cash to do another house-hack. You can house-hack the BRRRR deals too if the numbers support it. David Greene has a lot of great information and resources on BRRRR and he wrote a book on it too. You can look into getting a side hustle to earn more cash, but since you're house hacking already you will have extra funds saved up with the reduced rent/mortgage cost, so at the very least you're already on the right path by reducing your living expenses via house hacking!