Refinance question for BRRRR - New to the game

[Matt Henderson]

I'm reading about BRRRR and trying to educate myself as much as possible before investing in my first rental property. I'm stuck on one thing in the BRRRR model with the Refinance. In an example I read, person bought house for $75k and put $30k of rehab into property for a total spend of $105k. The ARV on the property is now $150k. Time to do the refinance. The example says your lender gives you the refinance at 70% LTV of the home ($150k x.7 = $105k). Here is where I'm lost...I realize you would get your $30k back because the $75k loan is paid off and now you have the extra $30k, but now don't you have a higher loan ($105k now vs original $75K) so you owe more money? Doesn't this now increase your monthly mortgage payment? Just confused on this part of the strategy and hoping someone can clear it up for me. Sorry if this seems trivial to some.

[John Chong]

You would refi to get out of the short term interest only loan or pull your cash out if you bought it all cash. DSCR's loans are longer term, usually 30-year fixed loans.

The reason you would want to BRRRR is to build out a portfolio and leverage that portfolio to buy more properties.

You would still have the rest of the $45K in equity when you sell the home. When rates come down, you can also rate-term refi and get better cash flows.