Please help me understand BRRR strategy!

[Suyog Patel]

Hello all,

I tried my best to understand the BRRR strategy but not sure if this is right in my situation.

I have a first rental property purchased at 110K with a cash flow of 600. I rehabbed it with additional 15K in improvements. The ARV I expect to be in the 150K range. I used a conventional loan with 20% down.

If I refinance per the BRRR strategy for my next rental investment, I can take cash out of the refinance tapping in the equity, but does that not mean increasing the monthly mortgage on the current property?

I am trying to figure out the best minimal risk strategy for my next rental investment.

Pls see below. Does a ~18K cashout with a mortgage increase of 80.00 make sense or I am missing some thing?

Thanks in advance

Purchase price	110
Downpayment	23
Loan amount	87	mortgage: 391 @3.5%
Rehab cost	15
ARV	150	(Conservative could be higher)
Refinance amount at (70% LTV)	105
Cashout (105-87)	18
New loan amount (increase of 18k)	105	new mortgage: 471 @3.5%

Thank you in advance!