Does BRRRR ruin cash flow?

[Monica Evans]

Hi guys!

If anyone can help clarify this for me, I would greatly appreciate it!! When you BRRRR a property, would your cash flow go down and potentially go away?

My husband and I have a rental that is cash flowing $525/month and I’m thinking that if we refinance to pull equity out (we rehabbed it prior to renting it out), wouldn’t the mortgage payment go up and therefore we would lose part or all of our cash flow? If the answer to that is yes, what is the financial benefit of pulling the equity out only to lose cash flow? I get that it could help fund the next investment however are there any limitations on the numbers to ensure this doesn’t make a great deal bad just so you can buy another property?

What am I missing? I would appreciate any insight!!

Thanks so much!

Monica