BRRRR refinance risks

[Seth Tipton]

Hello BP forum. I've never BRRRR'd yet and I'm in a learning phase. Everyone here has been great about sharing knowledge and stories. I'm getting acquainted with the risks of any investment and am wondering about the refinancing risk of BRRRR.

The whole idea is to get a good refinance to pull your money out of the first property and move to the next. If the ARV appraisal comes back low it can halt your progress (or can it?)

My question to experienced BRRRRers is how often has that happened? What did you do? What are the upsides and strategies to deal with it. Looking for stories, insight, calculations etc.

I watched the BRRRR podcast with David Greene and he showed how you can get hammered on the appraisal but still have a good ROI but I am not sure I understood his math as it was pretty fast. What's the "for Dummies" version of dealing with that risk?

I'm curious about how likely you all think that is based on past experience.

[Tanner Marsey]

When starting out.... plan to leave money in the deal. Honestly, plan on leaving money in every deal even when you get the hang of it. It’s highly likely you will not be able to pull every penny out (not necessarily a bad thing, either) due to going over budget, low appraisal, market shifts and a lot of other things.