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I'm looking at this deal that I found from a local wholesaler. I'm approaching it with the BRRRR strategy and going in with a partner. I feel confident about the rehab budget which includes a $10,000 contingency. I'd appreciate any insights and suggestions the BP community has to offer.
Hi, @Nicholas Osweiler , a few things to keep in mind:
- Banks typically want at least a 6-month seasoning period before they'll refi based on a new assessment.
- During the 3 months you're rehabbing you won't have any rent coming in, so make sure you're accounting for all of your holding costs.
- Repairs are a little high. I figure 7.5%.
- You have to account for CapEx, even after a rehab. 7.5% is a safe bet over time.
- Insurance looks high. I doubt it will be more than $50/month. Call an insurance agent and get a quote.
- Will you be responsible for any utilities? Like water/sewer?
I'm showing a cash flow of ~$105/month after adjusting the expenses. Not enough for me, but considering how little you'll have in the deal, may be worth it for you.