All Forum Posts by: Adrian Au
Adrian Au has started 1 posts and replied 1 times.
Post: First BRRRR Deal, does this make sense?
- New to Real Estate
- Brooklyn, NY
- Posts 1
- Votes 3
Hello!
I am planning to invest into a real estate with a business partner. We have identified a duplex in Philadelphia. We plan to purchase this property and rehab this property with cash, and obtain a cash-out refi. This would be my first property deal, my business partner already has multiple homes. My primary goal is to own enough cash-flow properties that can eventually replace my income.
Acquisition cost: $220k
Rehab cost: $65k
ARV: $325k
Total monthly rental income from both units: $2500.
After financing, we would cash flow $400 per month, after vacancy, delinquency, cap-ex, taxes.
The cash-on-cash return is only around 8%. However, the ROI after cash-out would be around 45%, which includes an assumed property appreciation at 4%, and tax benefits.
The Gross Rent Multiplier is around 9.5.
Is this a good deal? What else should I look for? There are not of multi-family inventory in the are looking at. Any thoughts, tips, concerns would be appreciated, thank you!
Adrian A.