Cashout refinace BRRRRING

[John Cardinale]

Hello, I have a general question about financing my next BRRRR. Is there a general rule for how much money to leave in a BRRRR? What are the things I should consider? Is it always best to take out everything you put in and/or as much capital as possible? I've seen some folks say if you can still cash-flow at a LTV of 60% then do that. ATM, my stats are looking something like this. ARV $190,000. Total $ invested. $130,000. Potential rent $1400 - $1500. Thanks for anyone's help and advice! I should also note that I'm BRRRRing with funds from 2 HELOC's so 100% of these funds are borrowed at an adjustable rate if 8ish %.

[Kevin Sobilo]

@John Cardinale, a good question, but one without a simple answer. 

Whether to take out MORE than what you can cash-flow at is a choice not based just on the current situation but what you plan to do in the future!

So, if you cash-flow at 60% LTV but can take 75% LTV on a refi, what is the best use of that 15% going forward? If you plan to do more deals and need money to make that happen then that sounds like a good plan. If you are done buying for now, then leaving it in the deal isn't bad either.

The question I would ask myself though is where do I want that 15% potentially available deployed. Also, keep in mind the fact that if you don't refi it out that it will be work/cost to access that money later.

In your case, I would look at using that 15% to pay down my HELOCs so I have the most capital to jump on the next deal and be saving myself some interest in the interim, but for someone ready to retire from buying more properties leaving it in the deal could make sense.