Brrrr - Refinancing ?!
Hi All ,
The brrrr strategy was not easy for me to catch in the beginning because of the refinancing principle that i was not familiar with before.
Now when i get it , it is simply magical :-). I would like to present some example and i would be happy if can share you opinion for the
questions related to it.
Example :
Apartment price : 100K
Loan : 70K (446 USD Monthly Return)
Cash money : 30K
Renovation costs : 15k
Closing costs :10K
Total Cash : 55K
Rent Income : 1000$
Cash Flow : 554 before taxes (Rent - Loan return)
ARV (apprised) : 150K
Refinance : 70% -- > 105K
Cash Flow after refinancing : 100$
Profit : 105k – 55k = 50k
Ok , i ended up with apartment with a value of 150K that i don't have any cash in and this apartment is building equity in it.
my point is that i need the cash flow. according to your opinion should i take the 50k (the "profit") as cash to live from or i should keep it for darker days ? i'm not sure what is the right approach with the money that you are getting from the bank ....maybe better not to refinance it fully but only with the amount that i'm (in cash) in order to cover my initial expanses and then i will have a lower monthly return....what do you think ?
Thanks!