All Forum Posts by: Brian Larson

I have built up a network of private lenders (friends, family, other) that can make 7% interest only loans for 1 yr. I setup the note tied to the property and then am able to take on more deals at one time.

Its hard money lender without the orig fees/rates and terms they set. Essentially this network of people trust my process and have told friends they are getting 7% return on their money so I have people just waiting to fund deals. I generally repay the note within a year but have it the full time just in case.

My private money is a network of people I have put together so there are no closing costs (well none is a bit strong, I have to do some work) so there is only one set of closing costs in my examples.

As for your issue, I FEEL YOUR PAIN. there are very few BRRR deals out there and the competition has increased greatly. I almost never used to get 'highest and best' asks from my wholesaler but have had that on the 3 last deals...insane!

Lee, that is not how my lender has seen my deals. Here is what I have done:

 - Buy with my own cash, rehab with my own cash

 - Get a private note to cover both (either do this day 1 or after I have rehab done)

 - perform a Rate & Term Refi on the private note with my conventional refi

In this model I was able to get ALL of my money back and I did it around the 6 month mark on each.

I see your details and agree totally with what you have written but I think the key is to Rate & Term refi.

thanks

b

@Brian Garrett I am a few days late to this thread but figured I would throw out the spreadsheet I use to calculate deals. I created it before the BP BRRR calc and find it much easier to tweak and work through my analysis. I have also included a bunch of KPI's that I like to leverage.

You can check it out

I did several BRRRR last year and leveraged 75% of ARV as target for appraisal in order to get conventional financing in place. Depending on credit score, etc you may need to tweak that a little (i.e. 70% if your score is a little lower).

In all instances I was able to refi and have no money (including closing costs) in the deal. In fact, in a few I am arbitraging the rate and was able to get some cash back. Not bad having a cashflow property fully financed with a little cash back at historically low rates (4.5% in my case across most of my places)

 Funny you mention it,  I have a call later today with a lender to figure this out.  Yes,  they should be an option. Essentially you are buying like it's a Multifamily (income based approach vs lending to you as a credit taker)  and my hopes are I can get those going shortly. 

One thing I read was that you have to show 'experience'  as a landlord in order to get these but I am not 100% on that.  I am not worried if so since I have about 12yrs experience but who knows what they are looking for. 

 I am not using delayed financing as, to your point,  I can only get portion of purchase price back.  I am doing both limited cash out (I. E.  Rate/term refi)  when I have private money on the deal and also full cash out.  All are conventional. 

I am up against my limit with Fannie so I am looking at other ways to refi.  I have found a few that will go above the limit with specialty products. 

Lastly,  my wife is a stay at home mom,  but I think/hope I have the right requirements in place to get her tradional Fannie as well. 

Hey Nick. There are lots of opinions on this and of course I have mine. To answer your questions above I can say I use 8% for vacancy (and tweak up or down based on area), I do pay for Prop Mgmt and yes I save for CapEx (and maintenance for that matter)

I have built a BRRR calculator that you can find in my files here:

I also did a video showing how to use it with a real world wholesale deal that I analyzed. you can find more info in my post here:

Congrats to you @Tony Castronovo on getting these deals done. This is not an easy task and definitely a bit of teeth gnashing took place as you awaited appraisals and final refi (this is the WORST part of BRRR in my opinion).

I do have to agree with @Brent Coombs and @David Ferrette though in that this is not straight BRRRR in the sense that you do not have infinite scale due to coming out of pocket with so much $. Much better than turnkey but not giving you that scale.

I will say that with BRRR one of the hardest (maybe THE hardest) aspect is being diligent to your buying criteria. I have passed on dozens of deals this year that are just a few percentage points over my LTV% threshold (70 or 75% depending on lender/area). This is 'limiting' in the sense of adding more properties to my portfolio BUT it is the key for me to be able to use the same cash I have today over and over near infinitely. This is the key to me as when I do quit my day job I want to be able to add properties without needing a burst of cash or income.

Good luck on the next ones and see if you can tackle that ever elusive $0 in deal!

Well played @Account Closed It can often be hard to walk away but these numbers scream just that. Good call to look for better returns elsewhere.

Since it has come up in other posts I have decided to do a quick (10min) video walking through the calculator. I hope this clears up any confusion. I used a real wholesale flyer to enter the numbers and walk people through it.