However, some lenders do have specific guidelines. There is a seasoning period between acquisition and refinance, but there are no laws regarding the timeline before refinancing. If 75% or more of the ARV is worth more than the initial investment, this is a solid successful BRRRR because the investor can continue making deals with that same cash.
With this money removed from the deal and continued ownership of a high-quality, cash-flowing property, the investor can move on to another deal.
This is the same amount of money used to buy and rehab the house. The bank will allow borrowing of approximately 75% of that $120,000, which is $90,000. If it's worth $120,000 when done, this is a $30,000 addition in equity. Spend $60,000 on a home in poor condition and spend $30,000 on rehab for a basis of $90,000. First, pay cash or use a hard money/private money loan. The BRRRR method is a rearranging of the order of when you finance. It's difficult to scale this method when using a considerable amount of money buying good deals and doing solid rehabs. In this situation, the down payment and money sunk into rehab stays in the property. The traditional process involves simultaneous down payment and financing followed by spending time and money on rehab and finishes with renting it out for cash flow. Today we discuss executing the BRRRR strategy from long distance, COVID-, planning for 2021, tax strategies, and more. We're joined by David Greene, co-host of the BiggerPockets podcast, author, California real estate agent, and investor. How to Execute The BRRRR Strategy From Long Distance and Strategizing for 2021 w/ David Greene
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