BRRRR or BRR & RR until a better interest rate comes around?

[Amos Raymond]

Hey Bigger Pockets Fam!

My partner and I have successfully used the BRRRR method gaining us 5 doors in the last 5 years. However, last project (3BR-2BA, 1700 sq ft) has posed a dilemma. In short, we went over budget on the rehab and the proposed interest rate is ~8.75% if we move forward with refinancing. We used our own cash to buy (tax sale) and fully renovate as the property required going down to the studs. Our forecasted rental income of ~$2145/m and cash flow of ~$200/m was based on interest rates as high as 8%. Additionally, going a little over budget with a higher interest rate at 8.75% made us pause to reconsider other options. We are totally against paralysis in analysis so we need your help.

Could or should we consider delaying the refinance for at least another year, if we can likely get cash from other sources for the next rehab which is currently in the demo stage? What would be the implications, good or bad in regards to taxes, cash-on-cash return or anything else? Mind you, my partner and I have decided against personal financing at ~7.65% as we prefer not to risk our other assets.