Unsuccessful BRRR situation

[Ricky Reese]

I've been reading and studying the excellence of using the BRRR method for real estate. I want to paint a hypothetical BRRR picture that I would like feedback from the BP community. Let's say I was off the mark with estimating ARV for the refinance. I use a hard money loan (12 months) for purchase and rehab. Purchase: 40k, rehab: 15k, total: 55k. I finish the rehab and I bring in tenants. I go for the refinance to get out of the short term loan but all appraisals (hypothetically) come to 45k. Would you still refinance into a conventional and owe the HML 10k?