Still attempting to understand BRRR

[Amanda Glendenning]

Ok, I need help understanding how BRRR works in this scenario. We recently purchased a distressed 2 br 1 bath home for 48,500.00 and rehab costs will be roughly 20k. The A.R.V is estimated to be 100,000.00 based on comps in the area. lf i cash out refinance 80K based on the A.R.V. then this property will not cash flow. I know it's considered a BRRR success to pull out more than you put in, but if pulling out results in negative cash flow how is that a good thing? What am I missing?

[Nate Herndon]

Hi Amanda, welcome to the BP forums! I am located in Springfield, MO, so also in your neck of the woods! If your property isn't cash-flowing, I would not necessarily define that as a successful BRRRR. I think the 'success' of a BRRRR lies in the happy marriage between cash-out and break-even/positive cash-flow.

What are the DSCR numbers for your property?

Monthly rent:
Annual insurance:
Annual taxes: