Brrrr finance details

[Jeffery Rayome]

I am new to all of this. I have been researching for a few months now, but now I am trying to get into the details of everything. I know I want to use the brrr method to build my real estate investing portfolio. I plan on using some form of private money/ hard money to do the buying which seems pretty straight forward.

I am curious as how the refinance part of this works. From what I can tell that is the part that makes or breaks you. I have read that you need to have money down to refinance. My plan was to partner with a lender and limit my own money use. I am more interested in building the business rather than making money on it right away. While learning about the brrr method the refinance seemed like not a big deal as long as the numbers were right, but as I get into it the refinance seems like the hardest part. What am I missing or not understanding?

In my strategy I am building I don’t care about getting money upfront as I want to simply build an good collection of buy and holds. This will be more of a retirement plan as I don’t intend to touch any money in or around my real estate investing until I reach at least 30-40 properties.

[Nicholas L.]

@Jeffery Rayome you don't have to have money down to refinance, but you do have to have equity in the property. Say you buy a property for $50K cash and once you fix it up, the ARV comes in at $100K. You will be able to refinance for some percentage of the $100K - most people assume 75% for a basic BRRRR calculation. You'll pay closing costs just like you do for any financing activity, but you don't put "money down." Thus, it's ARV that makes or breaks the BRRRR.

If you'd bought the property with a mortgage, or with hard money or private money, you'd then use the refinance to pay off your loan.