The method you mentioned (BRRRR) is operating on the calculated risk that the property's value will appreciate enough (after renovations) that you can pull out a comfortable amount of cash and use towards your next purchase... all while the potential rental income from the newly updated property going towards paying down your loan balance. 

It's a big project (we went the custom route) but I'll operate it as a STR and expect it will gross $4,500/mo or more.While appraisals may not have caught up yet, I think you'll see strong sales prices for properties with ADU's.

We managed this project remotely, investing $125,000 in the property.

I’ve been renovating it and am almost done.

You bring your total down payment to the table for the property closing and they escrow the rehab budget to pay out in a series of draws as you complete the project.

If seasoning is less than 6 months you are often capped by lesser of 70% of ARV or purchase + renovation.

Anticipated rent once renovated: $1,650/MOAnticipated COC: 8.3%Thanks for reading, excited to post the next update on the renovation with photos! 

If you renovate, could you increase the rents by a lot?

If you find your contractors are missing repairs, you can a hire a home inspector that is very thorough before your renovation.

This is a business-purpose-only loan for real estate investors that allows you to use the projected rental income to qualify.