New BRRRR Strategy | Valor Lending Group
Would you like to learn about the New BRRRR Strategy?
Valor Lending group has got you covered!
What is BRRRR(buy, rehab, rent, refinance, repeat) and how can I capitalize on this method?
BRRRR is a real estate strategy that involves BUYING distressed investment properties. REHAB the properties. RENT the properties. REFINANCE the properties to pull cash out to purchase more investment properties to REPEAT the process all over again. If done correctly, this method can sky rocket your passive income and grow your real estate schedule to monumental proportions.
B is for BUYING
Finding a distress property to purchase is the easy part. Its the financing that could be the hard. Valor Lending Group has over 100 lenders that specially fund investment Bridge, Fix and Flip, DSCR, and Construction loans. No matter what level of rehab the property is in, Valor Lending Group can find the right lender for you.
R is for REHAB
Rehabbing a property is the most time consuming stage of the BRRRR method. Making sure it is safe, habitable, and up to the rental market standards in your area is very crucial. There should be some thought about the level of upgrades the property needs depending on its location and market rents. You never want to under or over rehab a property in a specific neighborhood.
R is for Rent
Renting your newly rehabbed property to new tenants is one of the most important stage of the BRRRR real estate strategy. This will lock in your passive income and able you to continue your BRRRR method. Many investment property loans are based strictly off of gross monthly rent and the ability to cover the principle, interest, taxes, and insurance payment. Getting the highest and best rental income will become a key factor into the BRRRR equation. Seem more on financing below.
R is for Refinancing
Refinancing the newly rehabbed property is very important. This will allow you to access equity to purchase more properties to build your SREO. Most common investment property financing is a DSCR loan. DSCR stands for Debt Service Coverage Ratio. The ability to produce enough rent to completely cover their PITI payments. The higher the ratio gets, the easier it becomes for that entity or person to obtain financing for the investment property. DSCR is gross rents divided by new PITI (principal, interest, taxes and insurance) monthly payment. If your property is collecting rents that covers your current PITI payment your property debt services. This program is excellent for investors due to no taxes or income.
R is for Repeat
Repeat is the final stage of the BRRRR method. Repeat the stages in order to maximize your real estate wealth. When repeating, always take notes during the process so you know what worked and what didn’t on the next round of the BRRRR method
The popularity of fix and flip loans in California has skyrocketed. The purpose of fix and flip loans, also known as rehab loans or renovation loans, allow a real estate investor to borrow a short-term loan to purchase and “fix up” to sell for a quick profit. These loans allow you to take out only one loan for multiple purposes which makes the process of obtaining the funds a lot less stressful. Valor Lending Group can help you with all of your purchase and renovation needs.
Fix and Flip Loan:
Rehab Loans also known as Fix and Flip loans are hard money loans used to purchase and rehab a property, and then resell it at a higher value. The Fix and Flip lending market has been quite frothy the past few months. If you are an experienced flipper, you may notice that your old lender of choice has increased rates, decreased LTVs, and in some cases quit funding altogether. For first timers, the market has become substantially hard to break into.
But great news! We have seen a resurgence in fix and flip lending in the past week and are pleased to announce we are funding in 42 states again, and multiple lenders are doing up to 90/100 (90% of purchase and 100% of rehab) with rates in the low 9’s.
New Valor Rehab Loan Highlights:
- Up to 90/100 (Purchase/Rehab)
- 12 to 24 month terms
- Loan amounts up to $10mm
- No Prepayment Penalty
*Based on best execution, 780+ credit score, LTV, SFR, etc.
Our new investment property loans can be a short-term or long-term process. The needs for a home buyer are different from the needs of an investor, so it is important to work with an lender that understands your goals.
Valor Lending Group has multiple funding sources for all types of rental property loan scenarios. By choosing Valor Lending Group you are signing on to receiving, outstanding communication, professionalism and a team that will go the extra mile to deliver perfection.
DSCR Investment Property Loans:
Sometimes called “Investment property loans” or “rental loans,” no tax return investment property loans do not consider a borrower’s income in the traditional sense.
The “cash flow” is just the monthly rental amount the property brings in. For example, a property renting for $2,000/month would be attributed a qualifying income of $2,000/month. The main requirement for these investment property loans is that the monthly rents cover the monthly expenses. It is that simple.
Not only is a borrower’s income not considered in the loan application process, investment property lenders do not request income amounts, in fact there is no income verification of any kind. No letters from employers, no W2s, and no pay stubs. Again, the income of the investment property is simply the cash flow of the property.
DSCR Investment Property Loan Highlights:
DSCR Purchase 15% down, DSCR Rate and Term Refi 85% LTV, DSCR Cash Out Refi 80% LTV, DSCR NO Ratio 75% Purchase/Rate and Term/Cash out
- No Tax Returns
- Employment NOT Required
- No Income Required
- No Debt to Income Ratio Calculated
- Cash Flow based on Subject Property rents | if property is vacant upon purchase market rents from the appraisal will be used to calculate DSCR
- SFR, Condo and 1-4 Unit
- Maximum Loan $6.5M
- Unlimited Financed Properties OK
Whether you’re a avid real estate investor or purchasing your first investment property, the BRRRR method can be used to your advantage.
Recap of our Loan Products:
- Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
- Stated Income Loans (Great for business owners and self employed ) No tax returns!
- 100% financing is available (we can cross collateralize other properties if there is enough equity)
- Valor VA Home Loan 100% financing up to $1.5MM
- Investor Cash Flow Loan – No tax returns or DTI calculation! Based on subject property cash flow
- Flipper & Rehab Loans (Flip a property with one of our many options)
- 2nd Position Loans up to $5mm
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up.
- Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
- Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
- Acreage Properties
- Commercial Loans up to $500mm
- 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
- Foreign Nationals Loans (no social security or residency required)
We also offer:
- 10, 15, 20, 25, 30 year Fixed, Conventional Conforming Loans
- High Balance Conforming aka Super Conforming
- Jumbo’s to $10 Million / 10% down Jumbo to $1.5mm
- FHA, USDA
- ARM’s
- Reverse mortgages up to $1 Million Value
- Refinance including Cash Out
We look forward to the opportunity to serve you!
CONTACT ME TODAY for immediate attention to your scenario!
**Rates and terms subject to change without notice**
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