BRRRR refinancing question

[Ignacio Linares]

Hello BP! I need some clarification. So let's say I get prequalified from a bank for 100k for example. So I buy a property and use the BRRRR strategy,I'm all in for 80k and the ARV comes out to 130k. When it comes to refinance at let's say 70 percent of ARV, that would come out to 91k. So my two questions are:

1) What's the relation between the amount I'm prequalified for and the ARV? Does it matter if the ARV is more than you're prequalified for?

2) If I'm reading this right, this means I'm pocketing 11k correct?

I know these are dumb questions, but would appreciate any clarification. Thank you

[Tim Delaney]

@Ignacio Linares the ARV can be higher than $142k, but you just may not be able to get a loan for more than $100k. The banks generally prefer a lower LTV so they would be happy. I saw someone give you a breakdown of the max offer assuming a $50k rehab, but as they mentioned you still need to factor in closing costs, taxes, and holding expenses (taxes, utilities, interest on private or hard money, etc).