Question about Refinancing as part of the BRRRR strategy

[Timothy Casallas]

Hello everyone,

I have a hypothetical yet not so hypothetical because it can become a reality question. I've looked up all the definitions of refinancing, but I'm just not grasping it in my situation so maybe someone can break it down Barney Style for me with this scenario:

Buy:

I Buy a home for 133k with a VA loan for no money down. 0%. Lets say the ARV is 150k.

Rehab:

It doesn't need much work. Only cosmetic stuff like new floors, paint and cleaning so I estimate it at 2k.

Rent:

I am going to be living in it, so I'm really only going to be getting a roommate for now until I move. He'll pay half of what the rent would be, so I'd be living in this home for less. When I move out, I will rent it out for $1,025 and cash flow about $100.

Refinance:

And here it is.. the part I'm confused about. So my question is if I live here for a year and for easy numbers sake, lets say I build up an equity of 10k. How would my refinance work?