BRRRR - Buy, Rehab, Rent, Refinance, Repeat

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Refinance/Cash out .... How much?

Posted Jul 23 2022, 16:36

Hi All,

One thing I need clarification on in the BRRRR method is the refinancing part more specifically how much cash I should pull out of the property. Property will have a ARV of about $250k and rent for about $2k. If I get cash out of the house to cover the rehab cost, $60k, then this would cash flow nicely. But if I get the full available cash out of the house, say 75% LTV then this increase my mortgage payment which reduces my cash flow on the house.

So here is my question but it is difficult to ask. If you reference the chart it shows a co-planar relationship between cash out loan and the payment and profit. Is there like a sweat spot or financial balance to which the cash out loan amount? In the BRRRR process what do most people do? 75% LTV or just enough to get and rehab another house?

On the current property I have used about 1/2 cash and 1/2 credit card for rehab. Do people use 100% credit on rehab and use the cash flow from other property and use minimum credit card payments to the end of the project? If so then I can see not getting out the whole LTV cash out.

Baton Rouge, Louisiana

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