BRRR analysis help!

[Tamera Muniz]

Working on the analysis of my first possible BRRR. Any insight is appreciated.

It is a pre-foreclosure 3 bed, 2 bath 2660 sq ft property. Hoarders lived here so tons of things everywhere and in need of a lot of cosmetic rehab including a complete kitchen gut and one bathroom. The ARV is $355,000 on the very conservative side and my estimate for repairs is $80,000. They have it listed at $299,000.

My analyzation is telling me my maximum allowable offer would be around $175,000 which is quite a bit under asking price. Since I'm going quite conservative with my ARV, does this seem fair to offer?

Thoughts please? 

[John O'Leary]

Yes, I feel the analysis is fair, and if you were flipping the property it has a decent margin. The $15k cash back is not a bad thing, It's just probably not every dollar you put in to lock the deal up. Just make sure that you don't over improve the property thinking you will get a higher value. When it comes down to the appraisal when you refinance they need supporting comps.