BRRRR: 20% down? Is that even possible?

[Daniel Mendez]

Good evening BP,

So I hear a lot about the BRRRR strategy but it seems like all the stories I have heard are people using this strategy by purchasing the whole property.

Has anyone used the BRRRR strategy with only putting 20% down?

If so, can you provide a few details? 

My biggest dilemma is how do I make sure that when I refinance the house, after putting 20% down, my new mortgage payment won't be higher than the rent. 

[Chris T.]

@Daniel Mendez You could use a HML by putting in 20% down. Fix it up to add value, and rent it out to stabilize it then refinancing it with a conventional loan.

However, if you are using a conventional loan (20% down) to purchase a property, more than likely you're not able to add enough value, and refinance it later. Unless there's a decent appreciation in a few years. 

If there is appreciation, rents will go up as well. Your original loan will be paid down some, and the new loan will be re-amortized.