Help with numbers please!

[Ginger Mermer]

Hello,

I’m glad to have found Bigger Pockets. I have A LOT to learn. I’ve been listening as much as I can and am looking forward to reading the posts here. I am about half way through the April 19 podcast, ‘How to “Invest on Repeat’”, and am a little confused by the numbers. I haven’t gotten to the real example at the end, so that may explain it, but I figured I would appreciate a conversation about it anyway. 

The made up example had a property for $220k, $50,000 in renovations, and $5,000 in closing costs for both the initial purchase and the refinance, so totaling $280,000 that the buyer has put into the deal. That all makes sense. But then he says, “if it’s worth $350,000, and we get a loan for 80% of that.., we get $280,000 back”, and that is the part I don’t understand. The getting money back part. Is that through the refinance? I thought refinancing just meant a better rate. Maybe I should Google that. 

And my own example, just in case anyone has any advice, is a home I’m purchasing for $242,500 on the 12th. It needs some work but is mostly updating, not repairing- new floors, updating kitchen cabinets, countertops and appliances, and enlarging the deck. I’m hoping to spend no more than $30,000 on all that, and hoping to sell for $312,000, but should I not be selling? I should be refinancing and buying another property instead? I guess this is a two part question. This will be my first “flip” (I’m a former gymnast so I’ve actually flipped hundreds of times 🤪😆😬). I had thought that if I sold the house for $312 and made $40,000 on it that I would use that as a down payment on the next one. I’m totally open to keeping it as a rental if that is the smarter way to go, but how do I know? In addition to beginning real estate investing, I’m also wanting to build a home for myself and my family. I appreciate any help you can give. I’m off to read and listen!

thank you!!!!