Cash flow for BRRRR could take a big hit in 2022. Here are some alternatives to try.
We’re probably three to six months out from the really cheap homes getting on the market. How can you plan to finance BRRRRs as values go down but loan requirements go up?
BRRRRs are about getting into value-add properties with little to no money down. But as we’ve mentioned, getting into the properties will be the hard part with money tightening.
Will there be any good alternatives to BRRRR in 2022?
Subject Tos As Alternatives to BRRRR
Here’s another way to look at rental properties with a BRRRR spirit:
What if you could take over someone’s loan and house with no money down, no credit or other requirements, 100% financing, and a great rate?
That’s what subject tos are.
You’ll see more and more subject tos popping up soon. Maybe someone bought their home at 100% last year, but values have come down 10-15% so they can’t sell without losing money or putting more in. People don’t want to go through foreclosure, so in a situation like this, they’d be interested in a subject to.
You can take over the mortgage and put the home in your name. You can do it properly, through title, and create a rental property using someone else’s financing.
This method doesn’t require your income, your credit, or any other qualifications. It only requires a secure set-up, and for you to make the payments on the mortgage.
This is a great way to purchase rental properties as an alternative to BRRRR in 2022 if you don’t have leverage.
Owner Carries in 2022
An owner carry can happen when the seller owns a property free and clear. In this situation, the owner takes on the mortgage.
The seller would likely plan to invest the money they get when the house sells. But the stock market is up and down, and banks only offer 2% maximum interest rates in CDs and accounts.
For the owner, carrying the mortgage when they sell to you is a way to double or triple their interest rate, secured by an asset they already know.
For you, an owner carry is easier, cheaper money. You won’t find a 5% interest rate, with 100% financing and no credit check anywhere else.
Open-Minded Financing Alternatives During Inflation
There’s creative financing available in the real estate investment world.
Whether it’s subject tos, owner carries, or OPM relationships, it’s important to look always into your options for doing zero down investments. Especially now that loans are less likely to cover 100% financing, it’s important to stay open to alternatives to BRRRR in 2022.
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