BRRR Rental Period Cashflow after Refinance

[John C Rider]

I just purchased my first property and trying to decide whether I should Flip or use the BRRR strategy. I got the house for $111k, and Zillow says the house is valued at $207k. I understand Zillow is not always accurate (they say it is now within 4.5% accuracy), but two VERY similar homes within throwing distance are for sale at $210k and $214k. I expect rehab costs to be $40k - which I expect my ARV to be in the $215-$220 range. Using the BP BRRR Calculator, my "Initial Rental Period" cashflow is $5,300; but after "Refinance" my cashflow is -$15.93. Cash on Cash ROI is Inf%. I would've thought the cashflow would be in the positive territory given I got the house for 52% ARV (assuming my numbers are correct). What am I missing??? Thanks in advance...

[John C Rider]

@Dave Foster Thanks for that bit of info! I'm a little "green" with investing, but have owned several homes throughout my military career and still maintain one in Killeen, TX, while living in Virginia. I'm still not 100% sure which route I will take, because the mortgage will be low enough even if I decide to use it for a place to stay when I visit family (my family and my wife's family still live there). We always have to eat two Thanksgiving dinners and go our separate ways when we visit, so would rather have a place to crash and bring our dogs. 

Again, thanks for the information and taking the time out to reply. I'll definitely look your company and up to learn more about the 1031 exchange, and hopefully maintain contact with you via BP or any other venue. 

~ John