Rehabbing & House Flipping
Market News & Data
General Info
Real Estate Strategies
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hospitable-deef083b895516ce26951b0ca48cf8f170861d742d4a4cb6cf5d19396b5eaac6.png)
Landlording & Rental Properties
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hemlane-a9392011949df124ea8ee63be2fb270c9423d6cd446ec67af23c96616e618606.png)
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
![Lance Castillo's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1510729/1621513067-avatar-lancecastillo.jpg?twic=v1/output=image/crop=613x613@0x35/cover=128x128&v=2)
The Third R in BRRRR???
I am going to give some hypothetical numbers to illustrate my question. Say I was able to buy a $100,000 property that needed about $20,000 in rehab to get to a good state for renting. Say I used a commercial loan to buy the property and finance the rehab. After getting renters in the property, it now appraises for $200,000 and I am able to refinance into a $150,000 conventional loan. Here are the numbers:
Say I paid $30,000 in closing costs for the initial commercial loan for the property which includes rehab costs.
Buy: $100,000 (for the purchase price of the property)
Rehab: $20,000
Rent: Say I am able to get about $1200 in rent per month.
Refinance: $150,000 (75% of the newly appraised value $200,000)
Repeat...
Ok so based on this example I was able to use the $150,000 I refinanced to pay off my initial commercial loan of $100,000 and the $30,000 I paid in closing costs. That leaves me with $20,000 in cash that I can use for future projects. Now for that refi of $150,000 would I have to give a down payment to open that? I know I will have the normal closing costs associated with processing this loan, but what about the standard 25% down payment associated with investment-based loans? Would I have to pay an additional $37,500 down to cover 25% of the new $150,000 loan I have? Thanks in advance!