Need help analyzing a potential BRRRR deal

[Jim Stevenson]

I'm looking at a SFR in northeast PA that is listed for 18k but I can probably get it down to 15k. It's in pretty good shape and would require about 10k to get it rent ready. I can get a Lending Club loan for 30k at 629.18 per month (9.44% interest rate) for 60 months to fund the purchase price and rehab. It would end up cashflowing 305.50 when accounting for 10% vacancy, 10% repairs and 8% property management. It would most likely appraise for 35k after a year and at 70% LTV I can pull out 24,500 and then pay off remaining balance of the loan.

Since this would technically be negatively cashflowing -$323.68, would this be worth it? Am I better off just trying to finance 20% of the purchase price?

[Jameson Sullivan]

I was just estimating a 25000 dollar mortgage plus those expenses you laid out (tax, insurance etc)

Heres what I see in that deal. even if you can cover the expenses for that first your and absorb the lost, that still means that basically your first 24 to 36 months after the refi will be profit free.

Example:

You buy the home, you carry it alone for 2 months while you rehab. $1260 Plus taxes and insurance total 1500

you rent it for the 850 and cash flow negative for another 10  months $3250

1500 and 3250 =$4,850 negative when you start Cashflowing. Your payments will actually proably equal about 500 dollars. so you will have 350 gross cash flow before expenses. take 200 for the expenses( Cap ex PM and vacancy) and youre left with 150 bucks. WOuld be good except youre negative 4 grand. 4850/150 cash per month equals 32.33 months. 33 months before you start to positive cash flow assuming no more expenses come up

TO me theres better ways to use your money. Hopefully someone else will chime in on here as well that knows a whole lot more than me!