BRRRR Analysis Question

[Noah Kellar]

Hello,

I am currently under contract for a home in Asheville, NC at $290,000. This property was built in 1905 & needs some rehabbing along with some cosmetic improvements. I have received retail bids for the work with a total ranging from 70k-80k. We believe the 3 bed 2 bath property would be worth 400k+ in good condition. I plan to do a FHA & pull roommates. I would refi when the property is complete & when interest rates come down. My long term goal is to make this a STR when I move out (great market for tourism). I would appreciate all thoughts & inputs. I want to be able to refi & purchase another property. Thank you!

[Jack Mawer]

I think your head is in the right spot and it sounds like you are eager to get started - the numbers look good in terms of adding value and an FHA loan is wise for your first project. In addition, I would recommend the short-term rental route especially from a tourism standpoint - run the numbers via a site such as AirDNA and compare that projected income to a long-term lease but it sounds like you would get a much greater return as an AirBNB, VRBO, etc. Good luck and happy investing!