What kind of loan is used in BRRRR for cash offers?

[Brendon K.]

David brings up an interesting point in his BRRRR book. He prefers to buy properties with cash straight up so he doesn't have a beginning mortgage. He mentions numerous advantages of paying with cash.

When you pay for a property and its repairs in cash, and then when you're ready to "refinance" though, what kind of loan are you going to get? This loan would use Loan-To-Value against the newly renovated appraisal ARV and then you get most/all of the money you invested back to spend on the next project. David goes through the different types of loans but doesn't exactly say what kind he gets when he initially pays with cash. Is it a "home equity loan" instead of a conventional loan?

Just learning for now, I'll reach out to some banks to figure this stuff out better later once my head is more on straight.

[Tony Gunter]

@Brendon K.

It’s a “Cash Out Refinance” loan. Conventional, commercial, it’s the same idea either way.