Did my first BRRR analysis. Is this a good deal?

Question

3 bR 2BA buying for $35k, needs $25k in renovations. Should appraise for $110K. Rent is $1100. Need to borrow $50k from Hard money lender, but plan to pull $70K out from the refi. Am I on the right track? sanity check anyone?

The BRRR calculator says positive cashflow = $168/mo

The BRRR calculator says positive cashflow  = $168/mo

James J Luka · Answer

Chicago

Adrian Kar · Answer

What market is this?

James J Luka · Answer

Thanks Jason! Yep, and $1100 rent is conservative. Should probably go $1200, I'm just being safe for now.

Thanks Randy! I hadn't thought of flipping it. The reason for the $70k was to have money to pay back my hard money lender and have enough reserves left to go the next deal without the hard money guy!

Randy Janoe · Answer

Be confident in your rehab costs or give yourself a buffer. Fortunately 70% of 110K gives you several more thousand in case expenses run over or financing is tied longer than anticipated.

Another consideration is if those numbers do pan out, flip the property and get two more projects working in the same manner.

James J Luka · Answer

I think this is how to do it. Let me know if I'm doing this right. Thank you all in advance!

https://www.biggerpockets.com/brrrr-calc/915292.pdf?c=1546994201

Chirag Shah · Answer

Curious to see your numbers, primarily the HML component. As @Cody Z. mentioned, a link to your calculator would be great.

Cody Z. · Answer

Hi James - Great initiative, I would just say it would be more helpful to have a link to BP Calculator of the property you're talking about to detail your analysis. Happy investing!

Did my first BRRR analysis. Is this a good deal?

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