Does anyone actually build the BRRRR model backwards, starting with what the refinance will realistically appraise at in your specific market?

The backwards build is the only way I've seen it make sense on paper, but I'm under contract on my first right now and the ARV piece is genuinely keeping me up at night. My agent pulled comps for me and the spread between the oldest and newest sale was almost 18% over eight months, same street, similar beds and baths. So I basically threw out anything older than 90 days and priced conservatively off the low end of what remained, which pushed my max offer down further than I wanted but felt like the only honest number I could defend. The part nobody talks about is that the appraiser is also going to be conservative, especially on a refi, and lenders I've spoken to here have been coming in 5 to 8 percent under what the purchase appraisal showed. So if you're modeling ARV at 200k, you probably need to underwrite it at 185 before you even touch the rehab math. Still terrifying to commit to that before you've swung a single hammer.

The appraisal is the variable almost nobody controls and it's the one that breaks the deal. I've had properties where my contractor and I were locked in at a number, comps supported it, and the appraiser came in 15k light because he pulled a sale from a zip code over that had no business being in there. In a moving market that risk compounds. I buy seconds so I'm not doing BRRRR directly, but the guys I've watched blow up their cash position almost always over-estimated appraised value rather than rehab cost.

What lender are you planning to refi with, and have you talked to them before you're under contract?