Help Analyzing Potential BRRRR Deal
Would appreciate any input on the numbers I am including below on a BRRRR and whether I am under/overestimating anything and/or missing anything. Also, rookie question and seems like common sense but I assume once I refinance and pay the HML back, I walk away with the down payment I made to the HML in addition to cash left over from the refinance - does that sounds correct?
Based on my calculations, after paying off the HML ($230,000) and paying points and closing costs on both loans, I am left with $7,100 + I would get my down payment of $40,000 back from the HML.
I feel like I am still missing something here as getting money back + my down payment appears too good to be true. Also considering whether I can offer slightly above list price on the property to beat out any competitors but still make sure the deal works.
Any input would be helpful - thanks!
Purchase Price: $200,000 (also list price)
Rehab: $50,000-$70,000 (likely closer to $55k with $60-70 being overestimate)
ARV: $350,000
HML Loan Amount: $160,000 + $70,000 in rehab (assuming highest rehab here)
HML Closing Costs: $8,000 (approx.)
HML Points: $3,200
Holding Costs (2 months): $4,200 (approx.)
Refinance at 75% of ARV: $262,500
Closing Costs: $10,000
Pay Back HML: $230,000
Total Loan/Holding Costs: $8,000 + $3,200 + $4,200 + 10,000 = $25,400
Cash Out: $262,500 - $230,000 - $25,400 = $7,100