I'm analyzing my first BRRR property in NJ, just outside of NYC. I'm considering buying the land in cash and using a hard money loan for construction. At the end of the rehab, I'd fill with tenants, refinance and be a happy investor (in a perfect world).
The back-up plan is to simply flip the property and take the cash out now for the next project.
The Project (2 unit Multi-Family):
Land Acquisition: 275k (I'd use my cash to buy)
Hard Money Loan: 100k (I might use my home equity line at 4% APR over 20)
ARV: 465k (This is my best assumption based on other comps)
Cash out: 26,250
Rent: 1800x2 (This is conservative)
Expenses: 400 (water/trash/electric/sewage/insurance)
Using these numbers the property looks like it generates a COC return of about 30% per anum (on the 26k outstanding). Can someone confirm if I'm thinking about this correctly? I use my own spreadsheets in conjunction with the BP BRRR calculator to come up with this estimate.
Any feedback would be greatly appreciated! Thanks!
Additionally, If I wanted to use a hard money loan to finance the construction portion and do the land acquisition in cash does anyone know how to manipulate the BRRR Bigger Pockets calculator to include that? I'd like to check my work.