I am doing a walkthrough of this property tomorrow. I will be using the VA Rehab loan. Im sitting here running the numbers both for rental property and the BRRRR method. The rental portion looks pretty good but when I plug the numbers in for the BRRRR method, it shows me losing money and cash on cash flow is negative. I must be doing something wrong??? But what I dont understand is when you refinance at the appraised value then of course that will increase your mortgage payment. So then my expenses are more than the rent. If someone has the time to look over my numbers that has experience at doing the BRRRR method, I would greatly appreciate some help!
Without seeing the actual numbers, yes you are correct that the mortgage payment usually goes up but a big part of the BRRRR strategy is the fact that you are renovating, so the rent you collect should go up as well which should more than cover the increased mortgage payment and expenses. If they don't then the deal is not a deal.