BRRRR questions? is this the perfect oppertunity?

Question

Hi everyone, I recently purchased my first home using my first time home buyers getting the 3.5% down. I lived in it for a few months and then decided to move in with family for personal reasons. since then I have been renting it out and it has been great cash flow. after a year of renting I started to look into the BRRRR process. I got the house for 115k and it is now valued at 200k. if I were to refinance I would get what I put down and put into it back in my pocket. is this the perfect opportunity to proceed with the BRRRR process?

Nick Marconi · Answer

Okay I see what your saying. As for the money I can pull out can I but a property with 20% down and have 2 rental properties. Instead of buying the house for cash?

Ronald Allen Barney · Answer

The new refi would reset LTV to 80%, so it's a potential loan amount of $160k gross and after the original principle payoff you'd get $45k.  If that's the only cash for your BRRRR you would likely need hard money to supplement the down payment, the closing costs, and the rehab.  There's math for you to do there when you evaluate a deal.  It will probably have to be distressed in some way with a "sneaky cheap" way to rehab, speculating a bit but $45k is pretty light going into most BRRRR deals.