I was running some numbers and it seems to me that when you're doing a BRRRR you have two choices: you can either pull a lot of money out in the refinance, which then helps you scale up quickly, but then you leave yourself with a high mortgage payment, and little to no cash flow.

This strategic move paid off handsomely as we were able to command higher rents than initially projected.Here are the key financial details of the deal:Purchase Price: $270,000 (jointly with a partner)Financing: Obtained a commercial bank loan with a 30% down payment, 7% interest rate, and a 20-year amortization period.Initial Rents: $1050 and $1250Current Rents: $1400 and pre-leasing for $1500 (making it a 1% rule deal!)

A 15 year mortgage requires you to pay whatever the monthly payment is with no flexibility, with a higher payment.

 Hey BiggerPockets family,I was just approved for an owner occupant, Fannie Mae, 5% down with a purchase price of $1.3 million for a 4plex in the Phoenix Metro of ArizonaMy middle FICO credit score is 759My current DTI debt to income ratio is 30%I have enough down payment, closing costs for the subject property, and enough liquid reserves for all 10 of my apartment buildings totaling 45 units in PHX Metro AZmy mortgage lender quoted me with a rate at 8.125% with me paying 0.156 points totaling $1,920My question is,does this 8.125% interest rate sound reasonable for an owner-occupied fourplex 5% down Fannie Mae conventional loan as of March 27th, 2024, at 1700 hours?

You'll need a 580+ credit score, 3.5% down payment, closing costs (2-4% of purchase price depending on credit score and state), and a DTI of no more than 57%.

He's offered it to me on a lease-option agreement, with a "purchase price" of $1.2M, "down payment" of $200k and 5% interest only payments on the $1M debt.

However, it may lead to higher monthly payments and increased debt.

This method not only ensures efficient funding during construction but also minimizes interest payments, given that construction loans typically extend over 12-18 months with interest-only payments.After the first year, my expenditures are as follows:Land: $200,000Construction: $600,000Interest: $60,000Total Investment: $880,000Here's where it gets interesting.

Is the pre-payment penalty worth the lower rate you'd get.

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