Updated almost 5 years ago on . Most recent reply
BRRRR rehab questions
Hello all,
Not sure if this subject has been talked about before or not. I'm not only new to the BP community; I'm also new to real-estate in general. My question has to do with the BRRRR method. After you borrow from a private lender to purchase a property you typically are paying the interest on the loan, insurance, taxes, etc. until you finish rehabilitating the property and get a tenant from what I understand. As you pay those monthly expenses you are investing in the property correct? Or is it because after you refinance you will get that "money back" that you have "no money down/invested"? Also when you refinance later do you subtract the portion you have already paid, during the rehab, to the lender from the total owed amount (loan + interest)? I'm just a little confused on the inner workings of what is happening during the rehab portion. Any more specific information would be greatly appreciated!