BRRR timeline question

[Natalie Kolodij]

Hey guys, 

I want to make sure I fully understand BRRR and that it's possible to utilize in the situation which I'm looking into...

I'm looking at small cottages in Florida that are in the 30-50k range that rent for around $800 

My example: 

• Purchase a $31k home with a hard money loan 
  • (Is it likely they will loan $46k to include repair cost, likely not correct? )
• I spend $15k on renovations to the home 
• Rent the home 
• Then go to a bank and say "I would take to take out a mortgage for this property based on current appraisal?" 
• Someone was telling me they would use recent sales price for 1 year and not appraisal value?
  • Is this true? Do I need to hold the home for a certain time before I can apply for a normal 30y mortgage on it based on it's newly improved appraisal value? 
• I also was told they would old loan 70% of value - is this correct? 
• If my ARV is in the $85k range
  • Based on the 70% I could finance the house for $60k 
  • Pay off the hard money loan at around $35k total 
  • I could then utilize the $25k remaining equity to put toward next project 

This is my current understanding/ questions/ things I'm not sure on. Any input/clarifications would be greatly appreciated. 

Thanks!