Question about the BRRRR Method

[James Hornbeck]

Hey Everyone,

I am new to BiggerPockets and have been reading a lot about the BRRRR Strategy. I have a question about the refinance part, and could not find the answer on other posts. My question is if I purchase a home for $100K ,rehab for $20K, and has an ARV of $150K; When I refinance and get $30k back out, does that increase my mortgage payment, thus increasing rent for the tenants or decreasing my bottom line? Is there a rule of "thumb" where every $1,000 borrowed is a $100 payment etc.?

Thanks

[Michael Totman]

James you're asking the wrong questions. The rent you charge the tenant is not dictated by your costs, it's dictated by your market and what someone is willing to pay. If you bought and rehabbed for $120k and it's only worth $150k, and the rent you thought of doesn't cover your costs, then the question you should ask is how to say no to these types of deals in the future and find something better.