Deal Analysis Advice - Forced Appreciation vs. Cash Flow

[Chelsea Whitt]

Hello!

My husband and I are in the process of searching for our first investment property and would appreciate some input from more seasoned investors. The deal we're currently analyzing is a BRRRR and is listed at $250k and is located in a great area with great potential for forced appreciation and low vacancy rates. Repairs and renos are estimated to be around ~$30-35k, and the ARV would is estimated at $365k. Estimated rent based on market research in the area would likely average at $2250/month.

We currently own our primary residential home and would prefer to leverage its equity to fund most (if not all) of the down payment through either a HELOC or Equity Loan. The remainder would be financed through a conventional loan.

Due to the high interest rates on both conventional mortgages and HELOCs, we're finding that the monthly cashflow takes a big hit both before and after a cash out refinance, almost breaking even. With good potential for forced appreciation and low vacancy, how worried should we be about this?

Would also really appreciate any feedback on the analysis itself! Thank you in advance!