Need Help with BRRRR "refinance" part

[Alfred Harris]

I'm a newbie in the real estate rehabbing market. I ran across BRRRR on a Brandon podcast. I understand most of it but got a little confused on The refinance part. Can some explain it in a newbie mindset? Thanks in advance

[Aaron Lee Murphy]

@Alfred Harris

So I gave an example based on you funding the purchase and the rehab. Generally, in most cases a Bank won't loan on a property that needs a lot of rehab. But, lets say you use a hard money lender for the purchase and a private investor for the rehab costs. So yes, you'd have to pay those lenders back, plus interest. Using the same example...lets say you use all $80,000 (re-finance) to pay back your lenders. That's assuming you borrowed $65,000 and payed another $15,000 in interest and holding costs. You still walk away from the deal with a stabilized property that's cash flowing. Then you do it again...and again...and again...using other peoples money. It works the same whether its your money or not.