Help figuring out how to make the numbers work for a BRRRR
So I am looking a buying my first property to BRRRR in Jacksonville, FL. I'd be using hard money to buy and do the rehab and then refinance into conventional and I cant figure out what piece I'm missing as to why these properties arent $100+ profit per SFH.
Here's some sample #s I've been playing with.
Home #1
Purchase price : $50,000
Rehab Costs : $10,000
ARV : $99,000
Monthly Rent : $950
HML : 85% of Purchase + Rehab + Closing (est $5000)
= $55,250 @ 9%
After the rehab, I could cash out refinance at up to 75% of ARV at 5%
75% of ARV = $75,000
This would get me all my cash out, and then some, but would leave me with a mortgage payment of $405/month
So after the BRRRR, the monthly numbers would be
Rent : $950
PM : -$76
Insurance : - $100
Taxes : -$100
Maintenance/Cap Ex: -$142.50
Vacancy :- $95
Monthly P/L : $31.50
I just cant quite figure out where the #s are wrong? Is the issue that these #s are better for a flip? Rent/ARV is too low (right around 1%) ? Financing too costly?
I could finance less and put more of my own money in and have a lower monthly payment and therefore more profit, but my goal is to build up a portfolio so I don't want to tie up too much of my own cash.
Any help is GREATLY appreciated!!