How to calculate cash on cash return and cash flow using HELOC
I'm new and want to make sure I'm calculating this correctly. I've searched the forums, used the BRRRR calculator, watched BP Youtube videos but haven't found the answer.
- How does my HELOC factor into my calculations below?
- Do you use a HELOC to buy for cash and then repay the HELOC back quickly or as slowly as possible?
- What am I missing in this scenario and is this a good investment?
I'm using a HELOC to buy this outright. My interest rate is 5.5%
Purchase price: $17,800 (plus $2500 realtor and inspections) - 3 bed 2 bath, 2 story house, 2 car garage. There aren't many 2 car garages in the area that are this usable (some are mostly unusable).
Initial Repairs: $7-10k (mainly new paint, carpet, lower cabinets in the kitchen, glass block in basement and upstairs bathroom, updating bathroom)
Expected Rent: $700/mo (probably doing Section 8)
Expenses = $310/mo (based on items below).
10% Property Management: $70/mo
10% repairs/maintenance: $70/mo
RE Taxes: $35/mo
Insurance: $57/mo
10% Cap X: $70/mo
I've used different real estate calculators but since they ask for the information differently I seem to be getting different numbers for my cash on cash returns and cash flow. Any help and guidance would be great!