Need Help Wrapping My Head Around The Numbers

[Michael Pilolla]

Hey BiggerPockets Community,

So here's the deal, I have a property that is valued at 190K that I can potentially get for 110K. It needs very little work, it's a decent SFH in a C neighborhood so I can only get about 1,100 in rent. After running the numbers, I can get a positive $2400 annual cashflow and a 9% ROI with a 20% downpayment.

I'm trying to be clear about what I can and can not do with this property, so I need a little help. 

Am I mistaking, or is this a clear Buy & Hold deal situation because there's really no opportunity to refinance the property at 190K to cash out right? Because if I do that, that raises my mortgage and blows up my positive cashflow...am I right?

Why am I having a hard time with the fact that I can't BRRRR this property? I should be able to BRRRR just about any property, right? Any suggestions on how to BRRRR this property?

Thank you so much in advanced for any and all help in better understanding this opportunity!

Sincerely,

Michael

[Joe Villeneuve]

No, you can't BRRRR any property. There are more properties you can't BRRRR than you can.

20% down means $22k.  With $2,400/yr in cash flow, it means it will take you just over 9 years to recover what you paid for it (DP), and you start making a profit.  That's a long time...too long of a time, to wait.  Too many things (that costs you more money) can happen in 10 years that will extend the time before you break even and start profiting.