[Calc Review] Help me analyze this deal - tree house

2 Replies

Please tear this analysis apart - what did i forget to account for or consider? i couldn't make it work to cash flow a minimum of $100/door until i remembered i don't have to take a traditional loan. so i re-worked it with a 10/1ARM in mind. I used the details from my contractor to create a rough work up of what needs attention. I used the details from comps and rent expectations from my realtor, zillow, and a local properties for rent flyer thing. (the 'tree house' i referenced in my title and description is a tree hit by lightening recently that is very near power lines. the city has stated that buyer must have tree removed within 10 days of closing. I got a rough quote from a tree removal company then added a small cushion for my estimate.)

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No such thing as $100 a door anymore for at least 20 years now .  So long it pays for itself you are doing fine. Can reduce cost manage it yourself.

@Kimberly Vallance Your margins in this deal are a bit tight. You're all in for $113k and your ARV is $125k, which isn't ideal for a BRRRR deal. You're also leaving most of your $43k in the deal and only walking away with $11k. Use rentometer or zillow to check your rents, and then speak to a property manager about expenses. Your Year 1 loss of $4k will be added to your out of pocket costs for the deal. You want to avoid deals with margins that are too tight and that don't cash flow. If something goes wrong, and it usually does, things can get expensive.