BRRR in Baltimore! Feedback on numbers- Any holes?

[Mike Rubin]

I am hoping to get a few additional eyes on these numbers and get a few other perspectives before pulling the trigger. I have been going back and forth with the bank on a foreclosure in Baltimore city, MD. This property is in a good area and next to Johns Hopkins and somewhat close to the water. The property is 4 bedrooms, 3 baths and also has a somewhat finished basement with an entrance and exit that will be a separate room w/ kitchen and bathroom (Not a legal duplex).

The numbers:

I had this house under contract for 205k but after inspection, pulled out. My number back to them was 190k which did not go through. At this point, they have reached back out and asked if I was still interested in submitting that offer.

I have comp'd the house at an ARV of 330k.

With a cash offer of hard money @190k and estimated repairs needed at 60K (My money) (I got a few quotes during inspection period) that leaves me with 250k initial investment. I will be paying .0725 on an interest only hard money loan(190k)- So add another 9k to that number. 259K.

• ARV=330k @ 70% cash out refinance of $231K cash out.
• Pay back my investors after 8 months @ (.0725) 190+9 = 199k
• 231k - 199k = (Leaves me with $32k cash in pocket)
• 60K renovation cost - $32k = a final investment of (-$28K) with about 100k equity in the house.

So - now I will have a $230k mortgage on the house - I will handle the prop management and lets say with the mortgage P+I, insurance and taxes it is around ~$1800/mo

I plan to live in one of the rooms, but without me I could get around $3000/mo in rent.

Really appreciate any feedback or thoughts. Is there anything I am missing. This would be my first "official" investment property- so I really want to make sure I get it right. Also, what ARV would be the lowest you would feel comfortable with?

Thanks!