How to calculate cash needed for BRRR?
So,
The big picture: My father is going to take a heloc out on his house in order for us to purchase and renovate a property and then we are going to use my personal first time home buyer, to purchase the house with a mortgage and pay off the portion of heloc used.
My credit is ok (650ish) but I have no money since my entire check goes into maxing out 401k and company stock plan. My plan is to :
1. Get the heloc
2. Purchase the house all cash with heloc $$
3. Renovate the house cash with heloc $$
4. Get a 90 % mortgage (to avoid pmi)
5. Get 10 % seller financing ( at this point the seller is my father so I'll be paying this back to him)
6. Seller pays all closing costs (or bank can pay some)
I'm thinking:
Purchase 1: $65K
Purchase 1 Closing: 8K
Renovation: $35K
Purchase 2 Closing: 12K
Mortgage: 135K
Seller Financing: 15K
The heloc would need to be at least 120K to cover purchase, renovation, closing to buy, and closing to sell.
When I get the mortgage of 135K, I can give all of it to my father and keep the 15 k will pay off his "seller financing".
Am I missing anything?