Does anyone have an answer to the following question about the BRRRR method for me?
The question: Using the BRRRR method, am I taking out two mortgages on a home and using the second to pay off the first?
For example: Let's say I'm buying a property and I'm putting a 20% downpayment on a good price under market value. Therefore, I am getting financing (a mortgage) for the remaining 80% of the sale price. After I do the rehab and get renters I then go through the refinancing process to get the ARV and LTV and use my LTV (my second mortgage) to pay off my initial mortgage (assumingI made sure the LTV is equal to or larger than the first mortgage).
The way you have described it see as follows. Mortgage 1 was for the purchase. When finished with the rehab and the property has a tenant in it, you are going to refinance the property. The refinance will pay off mortgage 1 and mortgage 2 will be your only mortgage. The BRRRR method is more commonly used with paying all cash whether it's your money or someone else's.