A BRRR Example - The Numbers Crunched!

[Joe White]

Hi,

I'm trying to learn BRRRR a bit better so I created an example I was hoping I could get feedback on so I can check my understanding. I understand the numbers are basic. This is just an example.

Example:

Buy Property that is worth $100,000:

• Get it  at a discount for $80,000:
• Put $20,000 payment

Renovate: $80,000

• Its now worth $240,000

Rent It

• $1,900/ month

Refinance it:

• $240,000 AVR - $80,000 still owed = $160,000 in equity
• Mortgage payment on that $80,000 owed is $391.21 (plus tax,ect, ect)
• 70% LTV of $160k = $112,000

Repeat:

• Use $112K to buy a 2nd home & to renovate