Seller counter-offered. Help Analyzing this BRRRR Deal!

[Alfonso Aramburo Zepeda]

Strategy: Buy & Hold, Live in for 2 years, remodel it while living in it, then move out.

I've been all excited since I "found a gem" but now after running number over and over and over again I break-even only if I manage it myself after moving out.

The property needs the following:
- Flooring - Currently it has a stinky-smudgy carpet

- Cabinets - Old, falling apart, discolored stain

- Countertops - Currently it has laminate jagged up counters

- Outside-Inside Paint - Stucco needs to be painted on the outside. Inside is dirty, discolored walls.

- Bathrooms - Super dirty bathtub, toilets.

Single Family Home Purchase Price: $355,000 

FHA: 3.5%

Mortgage: $2200

Rent: $2400

Comps Avg: $370,000-$440,000

Rehab Cost: $20,000

Is it a good Deal or Bad deal? 

Before moving ahead and accept the counteroffer I wanted to be sure that I'm getting myself into something that its worth it. 

This would be my 1st BRRRR, so I'm a bit nervous before jumping in.

[Ola Dantis]

@Alfonso Aramburo Zepeda First thing that pops out here is the rent to purchase price ratio as well as the purchase price itself. 

One thing I'd want to bring to your attention when you do move out and try to do refinance, the interest rates are going to way higher than 3.5% of the FHA, and the interest rates for investment properties will wipe out any cashflow and may lead you into the negative real. 

You never want to be paying additional rent with the tenant for your mortgage. Not a nice feeling...😟

Really your initial intuition was right, as when you start to run numbers over and over again you particularly want to listen to your gut and RUN 🤗