All Forum Posts by: Natalie Siedschlag

Other than having to pay closing costs twice and also not being able to potentially buy a property for a greater discount up front, why would using a conventional loan be a bad idea for a BRRRR, as compared to hard money?

Consider a scenario in which a property is currently rented with a lease in place for another 6 months. I wouldn't be able to renovate the property until it is vacant, and it is currently in decent enough condition that the bank would approve conventional financing. The current lease still allows for a little cash flow ($200 or less). Considering a purchase with conventional financing (either 20% down or 15% down with PMI) and then in 6 months do the minor reno (8k or less) and refinance with 30% greater ARV over purchase price.

With HML interest rates being 10-12%, can I just compare that amount of interest against the cost of having to pay closing costs twice? What other costs am I failing to consider?

Thank you, this will be my first BRRRR.

@Chris Boselli Thanks for sharing your BRRRR project in 38118. We are looking to do a similar project in 38116. Totally new at this, learning every day. Some of my questions might be a bit basic, but I'm going to ask them anyway.

A few questions:

When you calculated your rehab costs, did you ask your contractor to do a walk through before purchase to do the rehab estimate? How did you determine which contractor was the right one for your first deal or did you get multiple quotes? What kind of rehab did you do on this property? If you wouldn’t mind sharing your contractor in Memphis, I would appreciate it!

The rehab costs are held in escrow, is that held by the title company or how does that work to pay the contractors?

What PM do you recommend?

What appraiser gave you the low value? Which gave you the more favorable one? If you want you could message me them.

The private investors – did you just set up Joint Venture agreements with them or how did you structure this?

Thank you for your time, and congrats on a great deal!