BRRR Cash vs Financing

[Derek Rhodes]

Hi Everyone,

I am pretty new to this and just wondering why you have to use all cash to make the BRRR method successful. Could you not get the same result from normal 25% down with 75% financed.

For example if I bought a $100,000 property with $25,000 cash and $75,000 borrowed. Could I not still put an additional $25,000 in to rehab the property making its new appraised value $175,000 and then refinance at that point for 75% of the LTV. Taking out the new loan for $131,250 where I would pay off the previous loan of $75,000, pay myself back the $50,000 cash I invested, and profit $6,250 on the deal.

Wondering why it has to be all cash and what I am missing. Thanks for your help!!