Questions about BRRRR!

[Ray Pope]

Buy. Rehab. Rent. Refinance. Repeat. Can someone please explain what the benefit of the refinance is? Is that simply to see what the new value of the property is after you have fixed it up, or does it give you actual monetary benefit? I'm sure it's been explained 100 times but I'm just trying to fully understand this. Thanks guys! I love BP!!

[Pearce G.]

Simple example: I paid 55K cash for my first property plus 6K to rehab for a total 61K. I got it rented and then refinanced 80% LTV at a 70K appraisal. That put 56K back in my pocket and left me with only 5K of my own cash in the property. It's cash flowing nicely, and I was able to reinvest the same money in another deal.