BRRRR strategy question
First time with investing here in Upstate South Carolina and want input on how to go about the home I am rehabbing.
The numbers:
112k purchase price (cash)
30k on updates and remodel
ARV recently went from the 180's to the 250's after a few solds in the area (I am a local Realtor)
Rent will be around 1250/mo +/-
I stand to make roughly $45,500 (see below to check my math) on the refi which is fantastic, yet the mortgage will be a lot closer to the rental rate than originally planned and wanted to know if it would be silly to keep more money in the home for a safer cushion on rent/mortgage ratio, or take as much money out of the refi as possible to use for a second project.
Hopefully appraised value at:
250k
take out 75% = $187,500
- 112k purchase
-30k reno
= $45,500
Principal - Interest - Taxes - Insurance would roughly be $1150/mo and a 2/1 in this neighborhood brings 1200-1300 per month.
No matter what the ultimate ARV is appraised at, be it 200k, 225k, or 275k the question is to take out as much as possible for other projects or is there a fine line as to what to take out because of the rent/mortgage ratio? Thanks - hope this makes sense.