How much to take out after BRRR

[Miguel Ochoa]

when doing the refi after the rehab. how much do you guys pull out of the property? I currently have a home that I owe about $300k on and am building an ADU in the back after the building the ARV should be around $800k if i rent it out both places the numbers will be around $4700 a month. I could cash out refi around $625k and i would be breaking even after cost. do you guys cash out less to have a monthly income or go all the way and run property with no monthly profit?

[Brian Larson]

@Miguel Ochoa - I think is great that you are exploring options to build an ADU. I am currently building an ADU at my personal residence in San Jose.

I am using a HELOC to finance my project because a cash out refi does not make sense since my current fixed borrowing rate is so very low.

Additionally, I am only borrowing around 20% more of the property’s current equity to build my project.

Personally, I would be very careful with any ARV assumptions you make (unless you have experience) and I would not over-leverage, especially on a primary residence.

Those are just my thoughts but I am curious to hear from others too.