Can someone break down the refinancing "R" in BRRRR

3 Replies

Can someone breakdown refinance best practices in the BRRRR method for me? It's one of those things I hear on the podcast or read/conduct research on and like I hear it and I get it..... but it's just not clicking for some reason.

Can someone give me an explanation like I'm five? Or can I get a real world example with some numbers so I can visualize it better? 

Thank you!

Lowry,

Ok:

Not a perfect example, but you start with $30,000

B - Buy for $100,000 - put $15,000 cash down
R - Renovate for $15,000
R - Rent for $1500 / mo
R - Refinance for $190,000 - at 75% refi your cash out is $27,500
R - Repeat - you have $27,500 to do it again

If this is something you are looking to do, definitely get the BRRRR book by David Greene
https://www.biggerpockets.com/store/brrrr-ultimate





@Lowry Coe

The refinance portion is the last step. I have competed a number of BRRRR projects.
Buy - at a discounted price

Rehab - time is of the essence.  Depending on the rehab 30-90 days.

Rent - Select a great tenant - the property is now a producing asset

Refinance - I always use local banks. They are much easier to work with.  Build a relationship with your banker.  Remember if you bought at a good discount you can potentially pullout the purchase and refinance based on the appraisal.

Repeat - Find another property and do it again.