Do I Understand BRRRR?

[Chris Marston]

Hi all! I'm new to REI and am trying to understand the BRRRR strategy. Can ya'll tell me if the hypothetical BRRRR deal makes sense. Thanks!

Let's say I buy and rehab a property for $50,000 (all expenses included here, I'm trying to keep it simple) and it's ARV (did I use ARV correctly?) is $100,000. I then refinance for 75% of ARV. The bank gives me $75,000, I "make up" the $50,000 I initially put into the investment and pocket an additional $25,000.

Does this make sense or am I misunderstanding how this works?

P.S. I'm also new to the forums in general and wasn't sure where to post this. Should I have posted this somewhere else? Is there a BRRRR specific forum around here somewhere?

Thanks again!