BRRRR Method Question

[Nicholas Kitchen]

Regarding the BRRRR method, let's say you acquire a property below market price. You do a little rehabbing and raise rents after the lease is up. You do a cash back refinance on the new appraised value? Pay your private lender back. My broker is suggesting this is a bad option because of two reasons:

1) Lots of money for closing costs (again) and

2) The interest rate is going to typically be higher on the new refinanced loan.

Can somebody explain to me what I am overlooking? Or are these new interest rates and closing costs just the cost of doing business?

Thanks in advance!