Deal Analysis Practice Question
This is a practice deal analysis for BRRRR.
Subject property = 50k.
Rehab estimate with 25% overrun = 31250.
Closing cost = 1500
Purchase cost, cash = 82750.
My ARV calculation = 151632.
After refinancing, how did I become upside down of -$26,085?
I played around with the numbers and I only change the purchase price to 100k then that's where it gave me a positive outcome after refinancing:
It doesn't make sense that I have to purchase the house 50k more than it's asking for just so I can be on a positive side of things when it comes down to refinancing.
Can someone explain what I'm doing wrong, please?
I already appreciate you're reading this.
Thank you.