Okay, here’s the part where all your hard work and preparation pays off! Right?
A truly perfect BRRRR (imo) will return not only the purchase price & rehab cost, but also the closing costs (2x) & the holding costs during the stabilization period! 💸
The Treehouse 🌳
Rent - $1800
Piti - $895
Gross Cashflow - $905*
Read | BRRRR by David Greene is a good place to start on this subject. 📖
Terms | Be sure to compare 🍎 to 🍎, don’t just look at the rate. Also check out: the term, fixed or adjustable rate, points/ origination fees, closing costs, etc.
Shop Around | You may get rejected by many banks before you find the perfect fit for you and your project. Don't let that bother you. 💪 It’s extremely helpful to start shopping around for refi lenders before you even buy the property.
Appraisal | Check the comps beforehand so you know what to expect. 📈 Prepare a fact sheet for the appraiser with the recent updates & property details. You can include comps for the appraiser, they may or may not choose to use them but it doesn’t hurt!
Project Cost | When calculating the amount you want to refinance, it’s important not to leave out ‘hidden costs’. Especially if you plan to use OPM. See the pyramid 👆
Presentation | The easier you can make things for the loan officer, the more likely it is that your loan will go through. Be sure to present all your numbers in an organized fashion. 📚
So, does this mean if a project is not a perfect BRRRR you shouldn’t buy it? No, absolutely not. We do ‘imperfect’ BRRRRs all the time, it all depends on what your goals are.
