BRRR Question about Financing

[Justin Wilcox]

This question might sound like it has an easy answer but I don't understand. Please bear with me.

Here is the scenario:

I purchase a house for $100k, put 20% down. I renovate the property, it is now worth 150k. 

When I go to re finance, I have about 70k worth of equity in the property. 

If I understand correctly, I still have to barrow against the property to gain access to that 50k worth of created equity from the remodel correct? 

Or am I misunderstanding the process? 

Because if I cannot re finance and collect cash, why would I refinance after doing the work on the property? Or when you refinance, you take out a loan on the new amount that the house is worth and pay yourself back the re hab costs? 

Thank you.