My first rental property

[Account Closed]

I'm in the process of closing my first rental it's a solid single family but does require some rehabilitation. (New roof and cosmetic inside) The question or problem I'm facing is during negotiations I did not analyze the cost of rehab correct, the ARV I assumed will be significant smaller than I projected. Now the cost of the home is more than I projected. I'm possibly going to be in the negative depending on cost of rehab from initial acquisition. What is the best move that I can play to makes this work?

[David Zeek]

James,

I feel like your situation happens more than not. I recommend completing as many cosmetic repairs as you can before hiring a handyman or contractor. This may help you save a little. Did you pay cash for the home? Will the ARV be enough for the refinance to get your money back? If not, I would rent it out as soon as possible, and hopefully you cash flow well. After your mortgage is paid down, from the rental income, do the refi to get your cash out of it.

To make you feel a little better, I just closed on an investment property last week and the cosmetics are costing me more than expected too. I didn't buy it as a BRRRR tho, just a buy and hold for cash flow, but we are putting some money into it for better eye appeal.

Dave