Newbie first BRRRR investment analyzing help

[Alejandro Arciniega]

New to the group and first post to please bare with me.  I've been looking in West Michigan market for a few months now waiting for the right opportunity and I think I might have found it but I wanted to run it by some pros.  Is there something I'm missing? Something I should watch out for? Does the deal sound good? Should I walk away?

Here it is:

3BR 1.5BA 1844SQFT good area but home is in pretty bad shape. Looks like it was turned into an un-permitted duplex and rented to 4 college boys. I would want to return it to a SFH.

Purchase Price - $100k (I would pay cash for the deal)

Renovation cost - 35K. Had one contractor check out the property and this was his number.  He was recommended to me by a friend but I have not seen his work. When he walked the property he said it needs a new furnace, gas leaks, roof is leaking.  Is 35K reasonable for a large renovation?  

ARV = 150K very conservatively. Homes in the area range from 150k for 3br 1ba 1300sq to 206k for 4br 2ba 1800sq.

Estimated rent from rentometer is $1200

Recap/Numbers:

Cash in $135,000

ARV $150,000

Refi 75% ARV = $112,500

Total Invested after refi - $23,000

Cashflow less 5% vacancy, 5% capex, 5% repairs, 10% management, Insurance, P&I =$668 

Those numbers look great to me. Do they look good to an experienced investor? First deal so its a little scary to pull the trigger. 

[Dylan Tanaka]

@Alejandro Arciniega, great post. Welcome to BP!

I’m in the Metro Detroit area and the smartest guy I know on evaluating opportunities is @Paul Beets, maybe he can chime in.

Goo luck!