Typically people think FHA because it's what's thought of as the least amount down which is commonly the goal when we all get started.

- Suggest you Google "Amortization Calculator" and run a few scenarios to open your eyes!

Here's some online software options that you commonly see recommended on BiggerPockets.

This is a straightforward and common approach.However, make sure to document the change in the lease renewal or addendum, specifying the new security deposit amount.

Quote from @Dennis Bragg: Hey @Van Lam, I’ve actually seen a few folks in Gainesville work through a similar scenario.

@Fareen E.Great question, and it’s excellent that you’re thinking ahead about this scenario.

A scenario like that would likely result in getting your entire investment back upon refi and also a nice cash-flowing rental to manage.   

While I would have built $150,000 in equity, the cash flow simply doesn’t work.Now, let’s compare this to the market conditions when BRRRR was highly promoted (pre-2020).Interest Rate: 4.75%Monthly Payment: $3,057/monthRent: $3,600/monthIn this scenario, I’d be making over $500/month with $23,000 left in the deal, resulting in a gross 26% cash-on-cash return—an excellent deal.As you can see, rates and prices play a critical role in the viability of the BRRRR strategy.

However, we will likely need a property manager to assist with some facets of running this rental (since we would not live locally) and would primarily market it through platforms such as Airbnb and VRBO to start, (eventually setting up a direct booking process).Here's our question for those who have experience in STR's or who might be involved in a similar scenario: How challenging is it to meet the material participation hours needed to achieve active status?

Just depends on the situation/scenario.