Question about the brrrr method from a Canadian

[Jonah Simmons]

They make it sound so easy in the podcast. "Get a hard money loan, then just refinance that ***** and cash out! Easy peasy!"

Here in Canada you usually can only refinance 80% of the appraised value. So you'd have to buy at 50-60% market value. Which is pretty hard to find. Probably not impossible but c'mon. Also isn't the refinance loan generally financed at a higher percentage than a conventional mortgage? So after all is said and done you're paying a higher rate which would greatly affect your ROI. Any clarification on that would be appreciated.

Also from my research hard money lenders want you to have skin in the game. Which generally will run you 15 to 20% of purchase price. So wouldn't it be easier to just purchase with your 20% down then take out a line of credit for improvements then rent it out.

[Account Closed]

@Jonah Simmons

Investment properties here need 20% down, correct. “Hard money” this side of 49th is called a mortgage investment company. MIC for short. Private lenders. And they’ll run you about 9-12% currently.

Refinancing is easy here. Put your 20% down, use a variable rate mortgage product, do the appropriate renovations, refinance when done, pay your 3 months interest and cash out what you can.

You’re correct the podcasts make it sound far easier than it often is in reality. Think of it as the audio version of HGTV... harder to sell books if they are talking about the 147 different ways you can screw up. If you can manage to put 20% down and earn 2x+ on your renovation and still cashflow after refi you’re doing EXCELLENT.