Here is my plan, tell me why it won’t work!

[Yollan Kitsoukou]

Hi all,

I am new to real estate investing and new on BP. I purchased my first duplex last year, which cashflow $100. So I am currently living rent free with some extra cash in my pocket every month.

I just find another duplex on Zillow for $90,000 and it needs $30,000 in rehab. The ARV of this property is between $145,000 to $157,000. Even with property tax been pretty high $7,400, it still has a monthly cashflow of $600. I am planning on using hard money to get this deal going and I am interested in the brrrr strategy for now. Also, I already found a local credit Union that can refinance it up to 80% LTV.

I have a 9-5 with an annually salary of $41,000 which I am planning on keeping for now (mainly because banks love to see W2s). I have $20,000 in saving, which I can use in this deal.

My question is, why do you think my plan won’t work?

Thank you for your feedback!

[Tim Herman]

@Yollan Kitsoukou Need more numbers. You have to have a reserve account for vacancy, repairs, CAPEX. What is the gross income? BRRR 70% of $157000= $109900 cash out mortgage. According to your numbers you will be at $120000. There is a calculator under the tools section on the web site. You can use it up to 5 times before you have to join pro. You can use the Rental Analysis Template not as thorough as the calculator. Without your reserves if you need a new roof you will have to pay for it out of pocket.