Many homeowners locked in mortgage rates at historically low levels, between 2.5% and 3%, providing a golden opportunity for those refinancing or purchasing homes at that time.

I agree with you about how he needs to get refinanced in 3-5 years so I can cash out.

I'm sure there is a creative workaround but the trouble I am finding with BRRRR model is the Refinancing part!! 

The lender is wrong about refinancing.

I plan to live there while I renovate, then pull out my investment upon refinancing.

I plan to live in in while I renovate it, then pull out my original investment (and maybe a bit more) upon refinancing.

There is a lower ratio program of .80% in cases of low rents but the rates are higher usually in the 8.50 to 9.50% Be careful of your prepayment penalties as well it can lock you into a high rate or cost you money if you plan on refinancing in 12-24 months.If you ever have any specific quetions feel free to reach out I am always happy to help and talk REI!

Keep you eyes and ears open for  refinancing  options in the  forthcoming year...thanks and all the best 

You can also try the BRRRR method, which involves buying a fixer-upper, rehabbing it, renting it out, refinancing to pull out your initial investment, and then repeating the process.

@Chris Weaver yeah, these are pretty common in the real estate investor space.  25% down (or 25% equity left in the property when refinancing) is the normal requirement.