Seeing if I Understand BRRRR

[Jordan Bowen]

I listened to the BP podcast with Alexander Felice regarding the BRRRR strategy. And while it wasn't my first time hearing about the BRRR process, this podcast was definitely the most intriguing information I have heard regarding it. What I gleaned from the podcast was something like this:

1. Find the deal and purchase all cash 

2. Fully finance rehab costs in cash 

3. Go to title company, add rehab costs to original title/HUD

4. Appraise

5. Rent

6. Refi 75% of ARV for next deal

My first shot analyzing a deal in my county:

$65k out of my pocket (43 for the house, 22 for rehab)

Estimated $90k ARV= $67,500 cash return (assuming I pull out 75% equity)

I receive about $850/mo from rent based on comps

HELOC= $393/mo payment to bank (4.2% interest)

$85/mo to property manager 

Meaning I gross approx $372/mo 

Zip code is 31904. Interested in seeing what other things I need to consider. I'm still a few months from pulling the trigger on an actual deal, so I would love to hear constructive criticism now! Thanks!