Help Me Analyze This Deal- Bakersfield, CA 93304

[Richie Thomas]

The property is a 3 BR/1 BA in Benton Park neighborhood of Bakersfield, CA.

I approached this as a BRRRR deal, and wrote a blog post about my sources for these numbers (including the expected monthly rental income, which I realize is extremely optimistic to many seasoned investors, when compared to Rentometer numbers).

Even at this optimistic income level, I concluded that this deal was unlikely to succeed.  Nevertheless, I'd love any and all feedback on my methodology.  I care much more about your feedback on my thought process than on the prospects of this deal in particular, which was more of an academic exercise than a serious consideration.

Thank you!

[Daniel Winsor]

From what I understand, hard money is not going to be an option for an auction. I recently was looking at one and I know auctions are different based on state/area, but you probably need the full $100k or so up front. Hard money won't provide that until you have a purchase agreement. That's how it was in Florida, might be different in CA.

I lived in the Central Valley for a while. I also skimmed most of your other post. I think your utilities are too low, property taxes too high. PMI can be removed as you are well under the 75% LTV number after the refi. I think your 20% for Capex/maintenance are pretty high, but you are going to want to keep things tip top shape to be an attractive option.

If EVERYTHING worked out the way you wanted, I think the deal would be a decent one, giving you $150 a month. However, I think relying on such a fickle tenant gameplan makes it not a good deal. One single month of vacancy would wipe out your yearly profits.