Deal Deep Dive: SCOTTSDALE, AZ

2 Replies

Hi!

I am a new investor looking to secure my first BRRRR.

I am under contract with a property in Scottsdale, AZ and I’m looking for feedback about my deal from seasoned investors, lenders/loan officers, & agents who are familiar with my market.

The deal is as follows:

4BD / 2BA

Purchase Price: $333,000

Rehab: $45,000

ARV: $500,000

OPM: $299,700

Potential Rent: $3,300

I've used every BRRRR calculator out there so I'm really just looking for experienced thoughts.

One of my doubts is this: A loan officer I spoke with told me that, should I get a cash out refi at 80% LTV, I'm going to be left with less than $10k cash after paying off OPM & Rehab financing. However, that's not what my numbers tell me. Am I doing something wrong? Also, would 80% LTV even be likely?

I appreciate any and all feedback regarding this deal!

@Kate Campos

BRRRR deals have so many moving parts and levers that can change your numbers. You want to make sure that the ARV figure you have is solid. You don't want any major surprises when it's time to refinance. Also - make sure you're accounting for any holdover costs while the house is undergoing rehab and is sitting vacant.

I don't know where the loan officer got the $10K from, however, he might be talking about net cash after you've paid back your own initial investment in the deal as well. In that case, it's a good deal. 

Finally - yes 80% LTV cash-out refi seems reasonable from my experience.

I'm happy to do a deeper dive with you. I consult with new investors to help them make strong investment decisions that ensure their longevity in the real estate game. Strong financial forecasting and building the right team in a market can really make all the difference!


Best,

Brian H