BRRRR why 1 year?

[David Koopman]

I'm new, have yet to do a deal, been studying the BRRRR strategy and have a newbie question: Why must I wait 1 year to refinance? Once the house is rehab'd, why can't I refinance right away? Does it make a difference if the original finance is hard money vs private lender vs my own cash?

[Ross Lombardo]

You can make all the offers you want, but if you are relying on the (arv x .7) formula, I fear it will be a waste of time.  Here is my example:

  I bought a house in Norwalk Ct for $236k

  I put in about $75k in rehab

  The house appraised for $350k

If I used the arv x.7 formula:

(350,000 x .7) - 75,000 = purchase offer

245,0000 - 75000 = $170,000 ( Optimal purchase price}

Let me make this very clear.  If I bid even 230k for this property, I would not have gotten it.  Bidding 170k would be a total waste of time.

Maybe this formula worked 5 years ago but in todays market it is unachievable.