BRRRR Strategy with Hard money lender - Help me analyze this deal

3 Replies

I appreciate the information. I'm going to be talking to a few local HM lenders tomorrow at our local RIA meeting to get specifics on rate, points and payback. I would like to stay local, but when it comes to money, the lower the rate the better. Is there a video from Brandon outlining the BRRRR calculator? I haven't been able to find one. Sometimes I come up with some really odd numbers (325% ROI)?

Agreed about the 12% hard-money interest rate.  Depending on your credit, you should be able to do better than that.

Also, it looks like you're making a 10% down-payment ($5,990 / $59,000), but I don't see anything budgeted for PMI on your refinanced loan. Are you planning to have 20%+ of the principal paid off by the time you refinance?

Also, I see a vacancy budget of 5%.  According to these two sources[1, 2], about 13.8% of housing units in Jeffersonville, IN are vacant.  It may be prudent to bump up that estimate a bit.

Your property management estimate of 10% is in line with what I've seen other investors use.  Nice.

The CapEx and Repairs expenses are at 5% now. What year was this property built? Since you (presumably) haven't had much first-hand experience with this property yet, it may be wise to initially budget these higher and save up some cash reserves in case the roof leaks, the water heater breaks, or any number of other things happen.