Analyzing Deals with Future Refinancing in Mind (BRRRR)

[Brandon Z.]

While plenty of books mention the idea of refinancing cash out of existing properties to fund down payments for new properties, I haven't seen anyone talk about how to account for this in your initial property analysis.

In the book Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth by Larry Loftis, there is a line that reads something like "refinancing cash out of your property will make your mortgage payments go up and can turn a property with positive cash flow into a property with negative cash flow."

For this reason, if refinancing to fund further purchases is part of your plan, it seems critical to get your head around how refinancing will impact the big picture.

What are the typical closing costs? How can you structure a refinance to keep your payments the same or close to the same? How much equity gain do you need for refinancing to even make sense?