BRRRR Refinancing a custom amount to avoid higher payments

[Michael Caruso]

Hey all! 

I'm hoping to make my first BRRRR investment soon- though while looking through available properties I'm struggling with one thing.

I've found properties that can use improvement, one in particular I'll be able to get for about $40k below market value. This property, however, needs about $30,000 of repairs. I would like to repair this property using a line of credit, then refinance once the repairs are complete. However, my new mortgage payment after the refinance would put my cashflow amount in the negative. 

I've heard that banks will generally give the owner about 70% of the ARV- though is there a way for us to refinance and only receive from the bank a certain percentage that would keep our mortgage payments lower but still give us a majority of our repair capital back?

I'd like to get as much capital back from this investment so I can quickly do it again on another.

Thanks for your time! I would definitely appreciate any tips/advice!

[Michael Ealy]

Originally posted by @Michael Caruso:

Hey all! 

I'm hoping to make my first BRRRR investment soon- though while looking through available properties I'm struggling with one thing.

I've found properties that can use improvement, one in particular I'll be able to get for about $40k below market value. This property, however, needs about $30,000 of repairs. I would like to repair this property using a line of credit, then refinance once the repairs are complete. However, my new mortgage payment after the refinance would put my cashflow amount in the negative. 

I've heard that banks will generally give the owner about 70% of the ARV- though is there a way for us to refinance and only receive from the bank a certain percentage that would keep our mortgage payments lower but still give us a majority of our repair capital back?

I'd like to get as much capital back from this investment so I can quickly do it again on another.

Thanks for your time! I would definitely appreciate any tips/advice!

 Yes Michael, you can refinance to an amount that makes sense to you. It's not always 70% of the after repair value or 70% of what you spent.

It's up to you. You're the borrower on the mortgage loan so you decide NOT the bank.