BRRRR Method Refinance

[Jonathan Darling]

Hello everyone,

I'm just starting out in real estate investing and I'm thinking about using the BRRRR method. But the one piece I'm still not sure about is the refi. One example I've seen is you buy a house for $70,000 and put in $35,000 worth of work into it. So now you're into it for $105,000 and you go to refi and it appraises for $150,000 so you get a new mortgage for for 70% which is $105,000 and pull your investment pack out of the deal. But how do you know that $35,000 worth of work you did to the house to fix it up is going to increase the value by $80,000? Is this even possible or just wishful thinking?

[Brandon Turner]

Hey @Jonathan Darling- like Nick said, you just have to nail your ARV ahead of time. It's really no different than what a house flipper does. Now - is it easy? Not always. I misjudge ARVs all the time - sometimes positively and sometimes negatively - but I usually get pretty darn close. And sometimes I won't get ALL my money out of a BRRRR deal, sometimes I might have to leave some in there. But that also means I just didn't get a good enough deal - shame on me :)

Good luck!