Where is the Cashflow?!

[Matt Hudson]

Hello BP! I've been on the hunt actively for 7 weeks. I'm an impatient person (super high D if you're a DISC person) so I know I just need to keep looking. I've been outbid on 5 houses and most by a significant margin. Most of those houses weren't "home runs" but the numbers worked for BRRRR. Most cashflowing around $200/mo and leaving at most a years of cashflow in the deal after refi.

Over the last 3 days I've evaluated 3 houses and came up with the same issue. The houses have been well below market value. Comps are good and are able to pull out cash and reno costs after refi. However, they aren't cash flowing! They are basically breaking even. What am I missing? Is the market rent too low? Are my lenders numbers too high? Any advice would be helpful!

Below is a property I evaluated this morning for reference. 

[Jay Hinrichs]

@Matt Hudson my friend your drinking the BRRRR cool aid.. that's a very slow way to scale lets run the math.

you have 250k that buys you two properties.. you look and you look it takes you months to find them maybe more ergo your frustration.

you finally find the two pearls.. takes you about 30 days for a normal cash escrow.. now it takes you 30 to 90 days to do the rehab.. and then another 3 months to season in MOST cases to refi.. then your refi takes another month.. and of course your refi appraisal comes in low and you end up leaving money in the deal anyway ( this is quite common but not talked about.) so your going to grow at 2 homes per 7 to 8 months.. 

now lets say you put 20% down or 25k  on each house and financing them  you can buy 10 in a matter of 6 months.. 

your going to be 3 to 4 years getting to the same scale.. and if you saved 250k then while you making money on rentals and saving again you probably buy 1 to 2 a year after your first slug of 10... ???? so in my mind BRRR should have another R for RISK.. risk that the rehab goes wonky and way over budget. Risk that refi does not work he way you think or hope it will.. and of course 2 to 5 years from now maybe you don't get the great rates you get now if you just go out and buy 10 homes in the next 90 days at historic low rates and lock those in for 30 years.. your risking rates being 50% higher and cash flow not as good.

So that's the other side of the coin.. think about it.. and maybe you really want to buy a 750k mutli family and bunch the whole SFR idea.. if its rental income you want.