Am I mis-understanding BRRR?

[Susan Tan]

Please help me understand how BRRR works in real life: I have a paid off property that was appraised & I'm getting a loan on $48k on a 10-year fixed rate mortgage. The monthly projected bills are $492/month excluding the escrow bills. The net monthly rent after I pay off property management & HOA is $495/month. The rent does not cover the new mortgage. Are these really bad numbers that I should cancel this cash finance process?

If the same paid off property appreciates over time in future as I make more value-add repairs & I do a cash refinance on this same property, then that mortgage bill will be much more than $492/month. Is this supposed to be how BRRR works in real life?

[Joseph Cacciapaglia]

It sounds like you own a property that doesn't cash flow, regardless of the amount of debt. You are exacerbating the problem by trying to use a 10 year loan. You can't just buy any old property and expect it to work as an investment. You have to look at the rent and expenses ahead of making your purchase, and if the numbers don't work, you don't buy that property. It sounds like you would probably be better off selling this property and buying something that works better.