BRRRR - Refi cash out amount
When analyzing a long term rental deal how do you determine the appraisal value? In my analysis I am using the ARV as the refi appraisal amount. Trouble is the monthly mortgage increases based on the ARV or appraisal value from the lender.
For example:
Cash purchase price $50k
ARV $100k
75% cash out refi
The good part is I can get all my cash back. The down side is the mortgage on $100k does not give me the monthly cash flow I'm looking for.
What am I missing?
Thanks for your help BP!