Help with numbers on first BRRRR property

[Anthony J Ruma]

Hi all!

Was wondering if I could get some help and information on my first BRRRR property. I know that I might be missing some numbers here, so this is why I'm reaching out.

Home is in Texas.

Purchase price $39,900

Estimated Rehab $30,000

It’s just an estimate, but I’m sure it’ll be pretty close to the real thing, I’ve worked with GC before. I’m not sure of the closing costs yet, or any other fees (this is my first property, so pls bear with me)

Rent in this area is a strong $700/month for homes that are very, very, basic/average, with no updates.

Doing the math on just those numbers alone the total ROI is 12%. Sounds like a good deal.

However where I'm nervous, is in the ARV. As I mentioned above, my home is in disrepair, most other homes are just old and not updated cosmetically. Homes in the area range from 40k-90k, with a few homes in the 90k-130k. And from what I can see the larger homes are pulling in the higher value.. if every home in the neighborhood is valued so low, due to being not updated I'm assuming, then how is my home supposed to appraise for what I want. My home is a larger home, but I'm nervous that my ARV will not be where I want it to be. It would be awful to purchase property, rehab it, then not be able to pull any money out (BRRRR) because it's only valued at what my total cost was..

Does this make sense? Sometimes I think too fast and jumble my words.

Any and all help is appreciated.

Thanks,

Anthony