Need Help Analyzing a SFH Deal

[Kevin Young]

I am trying to figure out how to best work my loan on my first rental property and thinking if I should use the BRRRR or not. Here are the two scenarios - What am I missing? What else do I need to talk to my lender about?

OPTION 1

Purchase price: $285,000

25% down - $72,000

Interest Rate - 3.85 - rate cost = $2002 (monthly payment around $1,270)

Closing cost - $3,500

Prepaid cost (escrow, taxes, ins) - $1,510

TOTAL FUNDS TO CLOSE: $79,012

Rehab cost - $10,000

ARV = $340,000

TOTAL CASH IN DEAL = $89,012

OPTION 2

Purchase price: $285,000

20% down - $57,000

Loan Amount - $228000

Interest Rate - 4.5 (monthly payment around $1,348)

Discount - ($1,600)

Closing cost - $3,500

Prepaid cost (escrow, taxes, ins) - $1,510

TOTAL FUNDS TO CLOSE - $60,410

Rehab cost - $10,000

ARV = $340,000

TOTAL CASH IN DEAL - $70, 410

Refi at $340,000 value

70% = $238,000

- $228,000 loan amount = $10,000

(Closing cost - $2,500)

(Point paydown - $1,000)

New rate = 3.85 (monthly payment around $1,270)

Cash out of refi = $6500

TOTAL CASH LEFT IN DEAL = $63,910