All Forum Posts by: Nicholas L.

@Sam Stabler you "were told" this by whom? Do you have an FHA loan that says you will owner occupy for a year, or a similar product? There isn't enough information here to advise you.

@Dion Jones when you say "balance" I'm assuming that's what you still owe, making your equity $190k.  Is that right, or do I have it backwards?  And are you saying your tenant is about to buy the property from you?  If she buys it then you don't own it - or are you saying you're going to buy your next one while she is saving up?

@Rolando Santiago Jr it's more your debt to income ratio that will potentially be a limiting factor here, not your credit score. Talk to a lender and have them calculate your hypothetical DTI if you had purchased one property and were trying for another, and see what they say.

@Chance Hahn welcome.  Househacking is wise... if the numbers work.  It's a great way to get into investing with less cash up front, but you still need to take a cold, hard look at the numbers both ( 1 ) while you're living there, and ( 2 ) after you move out.

"transitioning into the BRRRR method" is a very broad question - I'll just say this for now, the more debt you have on your initial purchase (which is the downside of putting less down!) means you'll be carrying more debt. This may make it harder to invest, depending on how much cash you have, what your debt to income ratio is, what your next property is, etc. A lender can run various scenarios for you if you give them the right information - find some deals to analyze and run the numbers with a lender that is willing to run multiple scenarios for you.

@Blake Valdez it's very difficult to BRRRR with conventional financing. That doesn't mean you shouldn't do it, just be sure to run the numbers factoring in all your costs.

With townhomes you may have an HOA fee that needs to be part of your expenses, and you may have a harder time increasing the the ARV, because you may have fewer options as to what you do to the structure; hopefully there is an experienced real estate agent in the area that can guide you.

@Alejandro Valdes even if the terms of the seller financing are favorable to you, this seems like a lot of debt to put on your balance sheet based on the rent-to-value ratio.  Once you're in the conventional mortgage - you'll have it until it's paid off.

@Joel Roberts congrats.  Just so I understand - this was a live-in rehab, and you sold already?

@Jeffery Rayome There are certainly different options - for example, some hard money lenders offer long term products that are similar to a 30-year mortgage.  But the standard, 30-year fixed mortgage is usually the preferred option since it will have the best interest rate and thus the lowest monthly payment.

@Jeffery Rayome you don't have to have money down to refinance, but you do have to have equity in the property. Say you buy a property for $50K cash and once you fix it up, the ARV comes in at $100K. You will be able to refinance for some percentage of the $100K - most people assume 75% for a basic BRRRR calculation. You'll pay closing costs just like you do for any financing activity, but you don't put "money down." Thus, it's ARV that makes or breaks the BRRRR.

If you'd bought the property with a mortgage, or with hard money or private money, you'd then use the refinance to pay off your loan.

@Chase Guelette there are tons of great threads on BP about this:

https://www.biggerpockets.com/forums/12/topics/460291-experience-with-delayed-financing

The short answer is - most lenders will want a seasoning period, but there are ways to refinance sooner, although it may be for less cash than if you wait.  Also listen to Alex Felice's podcast on BP if you haven't yet:

https://www.biggerpockets.com/blog/biggerpockets-podcast-301-incredible-power-long-distance-brrrr-investing-alex-felice