First BRRRR refinance

[John Timmerman]

Hey everyone,

I'm doing my first BRRRR and we are likely going end up with slimmer margin than planned (Reno costs). With rates still going up. Is cash-out refinancing still a good idea as long as rent covers the payment + reserves? Should we wait until rates come down to pull cash out?

[Jared Hottle]

Depends on your goals. It is an opportunity cost question. Typically the goal of the BRRR method is to cash out so you can scale quicker. If you are looking at doing that I think cash-out and look for the next one no matter the rate just make sure you are cash flowing and be ready to refinance when rates drop. If you are scared to do the next one or don't know what you would do with the money and it will sit there, you would be "borrowing" that cash at a very high rate and would think about leaving it in until you identify a use for it.