Rent then Refinance or Refinace then Rent?

[Dakota Adney]

Hey BP!

I'm in the middle of my first BRRRR deal. I'm about one week from completing the rehab and am starting to dive into the "rent, refinance, repeat" portion of BRRRR. I've spoken to my local bank about the re-fi terms, and shouldn't run into any kinks as I've had a relationship with them for years.

The property is on track to look great- I purchased it as an REO and the previous owners left the place the wreck. I have come up with an estimated ARV should be very close to 75% in, but the appraisal will tell all.

My question is:

Why does the BRRRR strategy list "rent" before "refinance"? It seems like I should refinance and have the property appraised while it is clean, empty, and newly remodeled. After I put a tenant in it, who knows what it might look like...

Why wouldn’t an investor (i.e. me) hold off on placing a tenant in order to ensure the appraisal comes in at top dollar?

Would love to hear what experienced BRRRR-ers think about this!