I recently put in my first bid towards my first potential investment property in Miami Florida.
The property is a 2/2 condo listed at 1100 SF. My bid was beat and it is currently set at $103,500. So far comps in the area sold for $110,000.
The property does need work and I was able to get my neighbor, who's a general contractor, to come with me and access the property. So far he estimated $15,000 worth of work on the mid to extreme side.
I'm just tossing this out here as my first step out of my comfort zone. Ideas, opinions, options, and analysis' are welcome.
in order for BRRR to work, you have to buy it at a price, low enough that after the work, it is worth enough that you can finance your CASH back out, with a bank being willing to refi it to 75%
Where is the margin if you are at 104 plus 15k in rehab on a property that has comps at 110? Let alone that it has to rent for enough to cover your PITI, vacancy etc etc...
If the house is worth $110,000 by comps, and you're buying it for $103,000 plus $15,000 in repairs you're going to own the house for more than it's worth.
You don't buy anything for more than it's worth.
Also, BRRRR requires you to buy a far undervalued home in an effort to capture equity. you want at least 75%
So if this house is worth $110,000, and needs $15,000 in repairs you want to pay around $67,500 for this house
($110K * .75) - $15K repairs = $67,500
That way when you refi the house, you're all in for $82,500 and can get a 75% loan to repay you costs in full
Hey guys, thank you for the feed back, I really appreciate it. The bid ended up closing at $108,500 to another user.
I'm completely new to this and I'm trying to learn, but again I posted this for feedback and ideas.
I recently got my realtors license and I'm just trying to be as actively involved as possible instead of sitting on the sidelines talking about it.
the HOA will kill your cashflow too, you'll want to get a condo "cheaper" than something with NO hoa to make up for it.