Read the draw schedule three times, missed the seasoning clause underneath it

The thing that jumps out is you finished the rehab early and then had nowhere to go. I've seen guys deliberately slow-walk a scope because the money is not ready. Feels backwards but the carry cost is real either way. Did the contractor know your timeline?

9,900 plus 3,300 is a rough tuition bill but you got the asset and the lesson for the same money. Did the appraisal at month twelve come in where you expected, or did the nine months of waiting also move the number?

I'm new enough that I have to ask, what does seasoning actually mean here? I thought it was about how long you'd rented it. @fathom is describing it as ownership length. Is it both?

@ember it varies by program, which is the annoying part. Some count from the recorded deed date, some want a certain number of months of rent actually received, some care about both. That's why the ask has to be specific.

@ember mine was ownership from the deed date. The rent history mattered separately for the debt service calculation but not for the value question. @meridian is right that you cannot generalize it, you have to get the definition from the actual lender in writing.

@lantern the appraisal came in about 6k above what I'd modeled, so the wait did not hurt me on value. It just cost carry.

@girder the contractor knew nothing about my financing and honestly why would he. That's on me. Next time I'll tell him the date I need to be tenant-ready and let that drive the schedule rather than the other way around.

I've been in the analysis stage long enough that I've read maybe forty of these post-mortems and the seasoning one comes up more than any other single item. It never appears in the deal calculators either. Nobody's spreadsheet has a row for months of unplanned bridge interest.

Small disagreement with the framing. You call the rehab overrun normal at 42 to 47 and move on, but 5k over on a 42k budget while carrying 1,100 a month means you were probably also over on time, not just money. Scope creep eats calendar before it eats cash. How many weeks late was the finish?

The part I'd push on is why you only lined up one refinance lender. In every passive position I've reviewed, the diligence failure is single-source financing. If you'd had two term sheets with different seasoning rules you would have had an out at month four.

I've been reading here a while, and this thread is the one that made me redo my model. I had bridge interest as a fixed number of months. Now it's a variable tied to the refi date.

Does this make BRRRR a bad fit for someone who does not have reserves to carry an extra nine months? Genuinely asking. It sounds like the strategy assumes you can absorb a timeline slip that has nothing to do with your own work.

@kestrel it assumes you can absorb it or that you priced it in. I have a deal in progress right now where I underwrote fifteen months of carry on a nine month plan. If I get out early that's upside. If I don't I'm still fine. That's the whole trick and it's not complicated, it's just expensive to buy that margin.

What strikes me reading this is that the house itself performed exactly as planned. Rent hit, tenant placed, cash flow positive. The loss was entirely in the financing seam between two loans. That seam is where I keep seeing money disappear in these stories.

In the small rural markets I look at the problem is worse because there are fewer refinance lenders willing to touch the price point at all, so you get one or two options and their seasoning rule is just a fact you live with. @canton's two term sheets advice is good and also sometimes there is no second sheet.

Reading the whole thread, I think the fix is narrower than most of the replies are making it. @canton is right that one lender is thin and @harrow is right that the schedule slipped, but neither of those caused the 13k. The bridge note term and the refi eligibility date were set by two different parties who never spoke to each other, and @fathom was the only person in a position to reconcile them.

So the practical version for anyone working out their first deal cost: before you sign the acquisition loan, write down two dates. The date your bridge loan matures including extensions, and the earliest date your refi lender says they will lend against appraised value. If the second date is after the first, you either need a different bridge term or a different exit lender. Get both answers in writing and confirm them again a week before closing, because programs change and the answer you got in March may not be the answer in June.

That's a ten minute check and it's the whole thing. Everything else in this thread is good hygiene but that one comparison is what would have saved the money.

@tally has it. I do the same reconciliation on land entitlement timelines, two dates on one page, and it's saved me more than any model has. The discipline is writing them next to each other rather than in separate files.