BRRRR Loans

Last updated: August 8, 2024

Buy, Rehab, Rent, Refinance, Repeat. Grow and optimize your rental property portfolio with BRRRR Loans from OfferMarket.

The BRRRR method is arguably the most powerful and perfect real estate investing strategy for rental property investors focused on 1 to 4 unit residential properties.

Most investors use cash to purchase distressed properties, cash to renovate those distressed properties, and then refinance into a 30 year mortgage -- usually a DSCR loan. There are two problems with this strategy...

1. Using cash limits deal count and deal size

Using it instead of hard money can limit the size and number of deals that you can do in a given period of time. You will scale your rental property portfolio slower and miss out on larger deals.

We analyzed deal volume by BRRRR investors that purchase and rehab with cash compared to deal volume by BRRRR investors that purchase and rehab with fix and flip loans ("hard money", "fix and rent" strategy). What we found across all BRRRR investors on our platform is that using hard money accelerates deal volume by as much as 3x.

2. Seasoning

When cash is used for the purchase and rehab, it generally requires 6 months of seasoning in order to complete an optimal cash out refi.

No existing debt at time of refinance into DSCR loan:

Existing debt at time of refinance into DSCR loan:

Understanding the benefits of using debt to purchase and rehab, the most impressive BRRRR rental property investors that we work with all use hard money or fix and flip loans to purchase and renovate distressed properties and then refinance into a DSCR loan with just 90 days of seasoning.

BRRRR Loan: Fix and Rent Program

Our Fix and Rent loan program, otherwise known as our BRRRR Loan, is a bundle of Fix and Flip hard money loan on the front-end and DSCR refi on the back-end designed specifically for BRRRR investors to save time and money. Learn more about our Fix and Rent loan program and get an instant quote in under a minute.

BRRRR Timeline Using Cash

If you're using cash for your BRRRR deals, this is a common timeline and cash out refi expectation to set:

• Day 1: property is purchased
• Day 45: rehab is complete and As Is appraisal is ordered
• Day 60: property is leased
• Day 60 - 75: refinance at max cash to borrower on the settlement statement of 100% of purchase price + verified rehab (property can be vacant), OR...
• Day 180: refinance with no LTC (loan-to-cost) limit

Checklist:

✅ As Is appraisal
✅ Owner verification -- purchase settlement statement to verify purchase price
✅ Sunk costs rehab budget -- to verify rehab cost
❌ Lease (not required)

While this scenario can be very attractive to many BRRR investors, you are not able to recoup all of the cash you invested in the deal and you are not able to cash out more than you invested into the deal. This may be a good fit for investors that are not as sensitive to trapping cash in the deal, or for deals where the appraised value does not support a meaningful cash out. This would not be a good fit for experienced BRRRR investors who bought well below market value, completed a cost-effective rehab, and forced a high amount of appreciation above their cost basis.

Note: the refinance can close with no seasoning, under 90 days, on how quickly you can rehab the property.

BRRRR Timeline Using Debt

If you're using debt ("fix and flip loan", "hard money", "private money", "fix and rent loan"), this is a common timeline and expectation to set:

• Day 1: property is purchased
• Day 45: rehab is complete and As Is appraisal is ordered
• Day 60: property is leased
• Day 90: refinance at max LTC (purchase price + verified rehab) of 140%, property must be leased
• Day 180: refinance with no LTC (loan-to-cost) limit

Checklist:

✅ As Is appraisal
✅ Owner verification -- purchase settlement statement to verify purchase price
✅ Sunk costs rehab budget -- to verify rehab cost
✅ Lease (12+ month term)
✅ 1st month's rent receipt
✅ 1st month's rent receipt

Note: the refinance can close with no seasoning, under 90 days, depending on how quickly you can rehab and lease the property as long as you are OK with your loan amount being limited to 100% LTC and 75% LTV.

Should you use hard money for BRRRR method?

An objection by BRRRR investors who use cash for the initial purchase and renovation is that financing costs cut into the profit of the deal. While it is certainly true that purchasing in cash is more efficient from a transaction cost perspective, from our data and the performance of our most successful clients, we believe that utilizing hard money ("fix and flip" or "fix and rent" loan) for the initial purchase and renovation of the property is by far the best strategy for rental investors that want to scale in a timely manner, take down larger deals, and conserve cash.

BRRRR Loans Reviews

Since launching our BRRR loans program ("fix and rent"), BRRRR loans reviews have been overwhelmingly positive. We have been able to accelerate cash out refi timelines and deliver the most competitive no and low seasoning DSCR loan terms to BRRRR investors across the United States.

BRRRR Loans Company

OfferMarket is a BRRRR loans company, we specialize in serving rental property investors and providing you with the most competitive and cost-effective programs to grow and optimize your rental portfolio.

Best loans for BRRRR

Let's look at the most important items to evaluate in order to understand and confidently select the best loans for BRRRR.

Hard money ("fix and flip loan", "fix and rent loan") for purchase and rehab:

✅ Competitive interest rate -- get instant quote
✅ Low origination fee -- 2 points (% of loan amount) is standard
✅ No junk fees
✅ Ability to extend loan from 12 to 18 months
✅ No prepayment penalty
✅ No "points out" charged on payoff statement
✅ Streamlined draw processing (i.e. self-serve photos, no 3rd party inspector)
✅ Interest charged only on amount disbursed
⚡ Fast close

DSCR loan for refinance:

✅ Competitive interest rate -- get instant quote
✅ Low origination fee -- $2,000 or 1% of loan amount or lower
✅ No junk fees
⚡ Fast close

Best loan for first BRRRR Property

Many private lenders ("hard money lenders") are willing to work with you on your first BRRRR property. Most lenders that provide these short term interest only "fix and flip" loans for the purchase and rehab of the property will decide your loan amount based on your experience and the ARV (after repair value) of the property. If you have 0 similar verifiable rehab experience then you should expect the loan to purchase price to be 70% to 80% and your loan to rehab budget should be 85% to 100%.

While experience is the most important factor on your hard money loan, credit score is most important for your refinance...

On the back-end of the BRRRR strategy (the refinance), you can obtain funding from a DSCR lender, bank or conventional lender. Learn more about how DSCR loans compare to bank and conventional loans:

BRRRR Loans from OfferMarket

Until now, there has not been a BRRRR financing program that truly serves investors with the most efficient fix and flip hard money loan and the most efficient exit strategy into a no seasoning DSCR loan. OfferMarket, a leading private lender for rental property investors, is proud of the Fix and Rent loan program which we also call our BRRRR Loan.

Take advantage of our streamlined and discounted bundle of a Fix and Flip hard money loan on the front end to purchase and rehab your next rental property and a no seasoning DSCR loan on the backend to recycle your cash for your next deal. We have been perfecting our BRRRR loan program for the past 5 years to be the most efficient, complete financing solution for rental property investors.

We offer a competitive interest rate and origination fee on the front end fix and flip loan and we offer the lowest interest rate and fees in the industry on your DSCR refi. But it's not just about the most competitive terms, it's also about the fastest loan quoting, easiest processing and fastest time to close.

You deserve a BRRRR lender that continually invests in loan program innovation and most advanced instant quoting and streamlined online processing in the industry. You deserve an instant and accurate quote without needing to talk to someone or fill out a form and wait to hear back. You should be able to easily breeze through a checklist of processing items and you should never be asked for the same information twice. The most competitive loan terms and the most advanced online workflow means nothing without the most knowledgeable and expert loan officers and relationship managers and closers who can ensure that your loan is properly structured to meet your real estate investing goals.

Our mission is to help you build wealth through real estate and we look forward to serving you on your BRRRR investing journey.