Feedback on BRRRR analysis
Hello all,
I am currently looking into a BRRRR rental.
Single family home in Houston (Katy area) built in 1978. Flooded during Harvey, first time flood, professionally remediated.
3bed/2bath/2 car garage
1,635 sq/ft
Asking price: $95,000
Estimated rehab: $35,000
ARV: $145,000
Cash purchase.
-----2 reports attached.
Report #1: Shows a negative cash flow of $44.18 (if property is purchased at the asking price of $95,000).
https://bp-v-newproduction.s3.amazonaws.com/upload...
Report #2: Shows a positive cash flow of $80.43 (if property is purchased at negotiated price of $71,250).
https://www.biggerpockets.com/calculators/shared/847958/505311ff-7b4b-44c3-a260-0d78cc2c2163
Both reports have Property Management included for future protection.
In order to pull all my cash out of this deal with a 75% LTV refinance, the maximum I could purchase this property for would be $71,250. Assuming it does appraise at $145,000. I did take into consideration that the home was flooded and calculated my numbers with a 10% hit on ARV as opposed to pre-flood comps. In other words, the ARV pre-flood would have been ~$160,000.
I am not too concerned about cash flow, only to stay positive. My goal is to focus on loan pay down and not so much cash flow income as I already have a stable income.
If you guys can provide some feedback I would appreciate it. This would be my first rental property using the BRRRR strategy so any information would be helpful. Thanks in advance!