The Third R in BRRRR???

[Lance Castillo]

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!