BRRRR Strategy Questions

[Caleb Dryden]

I heard a podcast recently talking about the BRRRR strategy. It seems like a great option but I have some lingering questions and hoping some of you who've had experience with this approach can help.

Example: I buy a fix'n flip (with private funds) for $85,000, put $20,000 into repairs, and the final appraised value is $150,000. I would then go to the bank and get it refinanced. At 70% that would allow me to cash out $105,000. The next step is where I'm uncertain of what to do with the cash. If I pay back the investor, then I essentially take on a $105,000 debt through the bank from the refi. Which doesn't get me anywhere b/c I could've just taken out a conventional loan from the beginning. If I throw the proceeds into another property, then I'm not cash flowing anything from the original purchase since the investor is being paid out a monthly interest rate (which is all the rent money). I feel like there is something missing that I haven't heard or discovered yet. f

Does the same scenario change at all if the purchase was made in my name using a HELOC?

Any tips? Much appreciated...