Investor · Tampa · Member since 2018 · 289 posts · 107 votes
5y
@Ali MirRasekhian just a few things to note. Closing costs are usually 4% of the purchase price. Your cash needed at purchase can be a smaller amount if your hard money/private money loan you the funds to rehab. To include that in your calculation, in the purchase section you can select )% and where it ask to enter the value, ensure that total amount includes the purchase price + rehab amount.
You also have the option to wrap your loan fees in the loan when using short term money. Most banks will only refi up to 75/80% of the ARV. Find out what your bank is willing to do. I usually use 75% of the ARV so in your analyzed that amount would be $60,000
Another thing to note, your repairs, CAPex reserves will be determined by the work that will be done for eg: if you are getting a new roof, new HVAC,etc, u can budget around 4-5%, check wit your property manager to determine the vacancy rate as still will be determined by the area as well. To have a better idea of insurance as well, on Redfin.realtor, they usually show the insurance amount in the payment calculations, you can use that as guide as well to determine the insurance amount.
Lastly, ensure you budget for closing costs for the refinance aspect that tends to be between $3000-$5000 (confirm this with the bank that you will be using for the refi process
Investor · Los Angeles · Member since 2016 · 33 posts · 10 votes
5y
@Keleisha Carter Thank you very much for your detailed feedback. The Hard Money lender I've connected with will fund 100% of the initial purchase and rehab. Thank you for catching the refi amounts, I believe I had my numbers incorrect there as well as lower closing costs. Right now my goal is to keep analyzing properties and ensuring that I do have my numbers correct for when I am ready to pull the trigger.
@Timothy Lewis the lower priced properties certainly aren't bringing in a ton of cash but the COC seems to be higher than other areas and the out of pocket is where my budget is for now. Always open to looking in other neighborhoods as well if you have suggestions.