All Forum Posts by: Dave Chimobi

Your current numbers aren't even taking into account maintenance, capex, vacancy. Even if the property is in good shape, you'll inevitably have repairs to take care of. On top of that, your cash flow will weaken after you refinance so you may be in the negative.

If this were my property, I'd sell take the 100k+ profits and 1031 it into a better cash flowing property. Maybe a small multifamily or just a few houses in a better cash flowing area.

Why not just sell it?

If your all in investment is $228k and you're estimating that it could sell for ~$330k, then I would offload that immediately. Especially with the cash-flow only being $100 per month. If you can net $75k after all of your expenses are paid... you could move on to the next project with your pockets busting. However, if you chose to rent it out, it would take you 62 years to make that amount of money. 

Maybe finish the basement (adds value), sell it (Flip) and use the funds to find a better BRRRR

How many bed/bath? Is $1550 competitive with local market? 

Ideally you'll want to be cash flowing $100-$400 all in. Not sure how your mtg is breaking down (1100 with cash out)? 

@Dave Chimobi

You are using a 20% expense ration before P and I and that doesn't strike me as nearly enough to reflect what your experience will be over holding a property long term. I think you need to annualize capital expenditure projections and add that to your expense ratio. I think you have realized a solid appreciation, but think you are holding a negative cash flowing property currently. So, I would not have it cash flow more negative to buy another property like this unless you are focusing on appreciation and can carry the negative cash flow. Make sure you are comfortable with this as negative cashflow holdings are not infinitely scalable.

1) If it's a good deal depends on it's appropriateness for your situation. This would not be a good deal for me, but that's a very subjective question.

2) Objectively you should refi for 30 years, but there are many subjective influences that can make 20 years the best choice for your personal situation.

Sorry, this only qualifies your question!

Also, the question on 20 vs 30...my vote is 30. Leverage your cash. 

if you cash-out refi to 75% of ARV you are looking at 70k out, which recovers your 40k rehab and your 10k downpayment.

if you do that how much will your mortage go up from 1550?  it doesn't look like it will cash flow?  or is the 1550 figure a new refi mortgage for roughly 250K?