BRRRR Refinance to get your deposit back. Free money?

[Jesse Jaramillo]

Hey guys, I hear about the brrrr method and refinancing to get your money back. But I am not sure how that process works. Say you buy a property for 100k, 10%down. So 90k financed. After upgrades and rehab it’s appraised at 200k. You refinance.. does that mean they wright a whole new loan for the other 110k value added? Do they cut you a check? Thanks.

[Shiloh Lundahl]

@Jesse Jaramillo Yes it is possible to get a check back from the bank at refinancing a loan. I wouldn’t call it free money though for 2 reasons. 1) In order to have your “all in” (property cost plus rehab and all holding costs) be less than 75% you will need to find a very good deal which is harder to find nowadays with more and more investors in the market. So that means you put a lot of work into finding the deal and the money you get at closing the loan is the payment for all that work. 2) You are going to need to pay that money back plus interest over time. Hopefully it gets paid back by your tenant, but you will need to manage your tenant or pay a property manager to do that which is work. So the money you get at closing is for the work you do  or have done with the property.