When calculating ROI with this strategy is it simply NOI/Cash outlay, or should it be this
NOI/(Cash outlay-cash out refi)? So here is an example.
refinance cash out=40,000k
Would ROI be 3,900/62,500=6.24%
or would it be 3,900/(62500-40,000)=17.33%
One other quick question, if you are doing a live in rehab would it make sense to switch a couple R's in the BRRRR strategy? So should you buy/rehab/REFI/rent/repeat? It may take an extra 6 months of seasoning, but would owner occ terms be worth it?
Is your new mortgage for 62,500 or 102,500?
For this example the mortgage is for $240K and the Out of pocket would be $62,500. Net operating income is 3900 per year.