Do these numbers make sense??

[Zack Crouse]

First of all I apologize for potentially asking a silly question. So I'm interested in buying a single family 3/2. I want to use the BRRRR method but can't seem to make the numbers work and think I may be doing something wrong. The house is 50K, Rehab cost 35K, and the ARV is $120,000 conservatively. Rent in the area for similar homes runs at $1,200 a month. Property taxes $1,000 a year and insurance is around $70 a month. I want to gain all my investment back with the refi. Is there a way to work these numbers to have a positive cash flow? Any help would be great!

[Jack Mawer]

I'm not sure how much you are borrowing for the purchase and rehab but say you refinanced at 75% - that would be $90k which is greater than the purchase price + rehab ($85k). You will certainly cash flow with the numbers you provided for insurance, tax, and rent even at a rate in the 8-10s (Over a 1.25x - this ratio based on revenue/PITI expenses). I think the biggest struggle for this deal would be the property value especially in the DSCR space as most lenders would like to see a minimum loan size of $100k. Best of luck and happy to connect!