Springfield, IL – BRRR Analysis
Hey folks,
Not yet familiar with the Springfield area, but wanted to see if anyone had thoughts/suggestions on the analysis of the following BRRR deal: https://www.realtor.com/realestateandhomes-detail/...
This is a side by side duplex, one side currently rented, one requires repairs and rehab. There is still more due diligence to be had here, but trying to get in the habit of good analysis practice to aid in future deals.
Asking Price: $23,900
MFR: 1/1 on each side
** Will need more information on current rent and rehab costs, but median 1/1 rents are $550 for the area according to rentometer
Offer Price (~4k below asking): $20,000
Rehab Cost (est.): $25,000
Closing Costs (est.): $3500
Total Cash Invested: $48,500
ARV: $57,000
Rent after Rehab (combined): $1000
Expenses:
Property Tax: 30 / month ($350 / year)
Insurance: $17 / month ($200 / year)
Vacancy at 5%: $50
Maintenance & Repairs at 5%: $50
Trash: $15
HOA: $0
Gas & Electric: Tenant Paid
Water & Sewer $75
Misc: $0
Property Management at 10%: $100
CapEX at 5%: $50
Total Monthly Expenses: $387
M&I after Refi @ 80% of ARV (45,600): $245
Monthly profit after refi: $368
CoC (after refinance): 9.2%
Questions I'm hoping for some help with:
1) For hard money loans, do you typically pay interest only until the term of the loan is up when the remainder is due? If that's the case monthly payments on a 12% hard money loan of $45k would be around $430 / month over 12 months. This would still make the deal cash flow positive once renovation is complete on the vacant side.
2) Any thoughts on the above analysis? I know it's messy – I've tried to clean it as best I could but appreciate any help or feedback :)
3) Any other tips, tricks, or suggestions for this deal? From my math it looks like one that would be worth looking into further (neighborhood due diligence, more pictures of the vacant side, etc.), but would love to solicit some other thoughts.
Thanks!
Andrew