BRRRR Calc Question...

[Jordy Train]

So I made the jump to PRO and have started utilizing the calcs to analyze deals. Just a general idea of what I'm trying to do...

This will be my first true investment prop purchase, which I'm wanting to BRRRR. The plan will be to have 10k saved up in a reserve account, and use a HML to purchase a house between 50-60k, put in a 10k rehab, and turn it into an 80-100k ARV.

My QUESTION is...how would you put it into the calculator so the acquisition loan can cover the purchase price and the rehab? OR I guess another question could be, is my strategy sound with these numbers listed up above to begin with?

Thanks in advance

[JD Martin]

Possible but unlikely. Most HMLs won't want to have more in a deal than they can recover if they have to foreclose. If you do find someone willing to fund both sides you'll probably pay for it in a higher interest rate. Of course, if there's plenty of equity at the end and the HML thinks you'll be able to cash out without too much trouble they may go for it regardless. That's tougher when you don't have a track record behind you of doing a successful rehab & refinance.

On the flip side, one thing using a HML will do for you is have a second set of eyes screening your 'deal', because they're not going to fund anything they don't think will comp; they don't want to own the house.