BRRRR Investing Total Cash Invested Post-Refinance

[Steve Uhlig]

Good Afternoon Investors, 

Is there a rule of thumb you follow for targeting the amount of cash left in a BRRRR deal post-refinance?

Steve

[Joseph Cornwell]

@Steve Uhlig If i understand your questions correctly, you are asking what ideally you would have into a deal post cash out refi? 

If so, ideally you would be able to pull out all of your funds, perhaps a profit, leave 20+ % equity, and still have the deal cash flow nicely. However, this is extremely difficult. On my last deal I was able to put 22k down, 40k in rehab, and I pulled out 41k, so I still have 21k out of pocket in the deal, but my equity left in the deal is around 28k. It was not a perfect deal, but it cash flows well, and allowed me to buy my next multi family deal after the refi, so it worked for me.

On my current projects I am rehabbing and value adding two 6 units, when its all said in done, I will have about 110k out of pocket, and will be able to pull out around 130k after leaving 150k equity down in the new loan. Commerical properties value add can have much higher returns when done properly. 

@Grant Rothenburger Thanks for the mention!