Investors following BRRRR method can agree that the most complicated part of the process is refinancing. Hard to believe for outsiders, but it gets to be even more complicated than rehabbing. Refinancing is the stage where you get a reality check on how you are doing with your business venture and property. The experience can be stressful. Your property may pass the test, but the lender may find you to be unsuitable for lending, or the other way around. There is often waiting period before you can even consider refinancing. While the process, in general, can be straightforward, it is smaller nuisances like these that cause the most stress. It is advisable that you always have an exit strategy if any of your BRRRR process elements fail.
- You can do some things to set you up for success when trying for a BRRRR deal.
- For example, get advice first on how to be an attractive candidate for a loan, so you can work on any problem areas.
- If your property doesn’t pass underwriting, you should be more realistic with your numbers.
“Knowing these factors up front may impact how you initially purchase and pay for the rehab on the property.”