Clarification on Refinance and Repeat for BRRRR Stategry

[Nicholas Davis]

I'm still trying to gain knowledge before jumping into REI and I do apologize in advance if this question sounds silly. One of the things I don't fully understand about the BRRRR strategy is the Refinance and Repeat step. How do you get your physically get your money back out of the deal after the appraisal and Refinance so you can then Repeat and buy your second property?

For clarification, I'm not suggesting that the bank give me a sack of money after the refinance.  I'm just confused about how the difference between what you have into the house versus what you refinance it for turns into a vessel for repeating the process to buy your second deal.

Thank you.

[Ed Matson]

@Nicholas Davis - At the refinance closing you receive $120K cash.  You pay off the $80K first mortgage, and this leaves you with $40K of cash.  Indeed a sack of money for you to do anything you like.  And its tax free.  Just did this on an apartment complex.  You are trading equity for cash that you can put to work.