BRRRR loans: buy and rehab, then refinance on the new value.
One plan, two loans. A fix and flip loan for the purchase and rehab, then a 30-year DSCR cash-out refinance up to 70% of the new value.
No tax returns on either loan.
Get your same-day term sheet
A few quick questions. No credit pull.
What's the purchase price?
A rough number is fine.
Program snapshot
- Purchase
- Up to 90%
- Rehab
- Up to 100%
- Refinance
- Up to 70%
- Refinance term
- 30 years
- Tax returns
- Not needed
- Foreign investors
- Yes, no SSN
What you get
- Fix and flip loan: up to 90% of purchase, up to 100% of rehab
- Rehab funded in draws as the work is done
- DSCR cash-out refinance up to 70% of the new value
- Refinance qualifies on rent, not income
- Some programs refinance with no seasoning
- Both loans close in your LLC
Term sheet
Same day
Who it's for
- Building a rental portfolio with the same cash, deal after deal
- Buying below value and adding it with a renovation
- Refinancing a finished rehab off a short-term loan
- A foreign national growing a U.S. portfolio
How BRRRR financing works
BRRRR is buy, rehab, rent, refinance, repeat. It takes two loans.
A fix and flip loan buys the property and pays for the renovation. Once it's rented, a 30-year DSCR loan refinances it on the new, higher value.
The fix and flip loan covers up to 90% of the purchase and up to 100% of the rehab. The DSCR cash-out refinance goes up to 70% of the appraised value.
The refinance pays off the first loan and returns part of your cash for the next property.
BRRRR example: the numbers
Buy at $200,000 and spend $60,000 on the rehab. The fix and flip loan is $240,000, so $20,000 of your cash goes in, plus closing costs.
Rented and appraised at $360,000, the DSCR cash-out refinance at 70% is $252,000. It pays off the flip loan and about 3% in costs.
About $4,440 comes back to you, leaving $15,560 in a rented property worth $360,000.
The numbers
- Purchase + rehab
- $260,000
- Fix and flip loan
- $240,000
- Your cash in
- $20,000
- Refinance (70% of $360,000)
- $252,000
- Pay off flip loan + costs
- -$247,560
- Cash back to you
- $4,440
Illustrative example. Closing costs on the purchase not shown. Subject to appraisal and underwriting.
When can you refinance?
Seasoning is how long you must own the property before a lender refinances it on the new value. It varies by lender.
Some programs refinance with no seasoning once the rehab is done. Others want 3 to 6 months of ownership.
Plan the refinance when you take the first loan. Share your timeline with the deal, and the term sheet matches a refinance lender that fits it.
From request to funded
Send the deal
Price, rehab budget, after-repair value and expected rent.
Same-day term sheet
The flip loan now, with the refinance planned. No hard credit pull.
Rehab, rent, refinance
Draws during the work, then the DSCR refinance once it's rented.
Frequently asked questions
What is a BRRRR loan?
Two loans in sequence: a fix and flip loan to buy and renovate, then a DSCR cash-out refinance on the finished, rented property.
How soon can I refinance after the rehab?
It depends on the lender. Some programs need no seasoning once the work is done. Others want 3 to 6 months of ownership.
How much cash can I pull out?
Up to 70% of the appraised value on a DSCR cash-out refinance, minus the payoff of the first loan and closing costs.
Do I need tax returns for the refinance?
No. The DSCR refinance qualifies on the property's rent, not your income.
Can foreign nationals do BRRRR?
Yes. Both loans are open to foreign nationals, with no SSN or U.S. credit. The refinance goes up to 65% for foreign nationals.
Sources
Related
Ready to price your deal?
Term sheet the same business day. No hard credit pull.