Trying to understand BRRRR more.

[Levi Lewis]

Hello all. Im brand new here and I've been watching the podcasts A LOT. I'm slightly confused on the brrrr strategy when they explain it. When you refinance is the first property being paid off or is there still a loan on it, then another loan on every other property after? Any clarification is greatly appreciated.

[Andrew Steele]

When you added that initial 10k in renovations your new value would have to be higher than the initial $100k investment. Lets say for example the new appraisal came in at $150,000. So your initial $90k (purchase Price) + $10k (rennovation/repair) leaves you all in at $100k. Bank gives you a new cash out refinanced loan of now $120k (80% LTV). This new loan pays off the initial $90k loan, gives you your $10k in renovations back and you brought out $20k in equity (minus closing costs etc).........and repeat