BRRRR no cashflow

[Franklin D.]

Good evening,

I have come across a "discounted" property that needs relatively little work to be rented but there is no cashflow.

My market has very high property taxes and it is "impossible" to cashflow with todays rates and still tight with a lower rate in the future.

Purchase 140k

ARV 200k average

150k loan with 10k rehab included

Holding costs, closing costs, origination, 4 months (hard money) : 10,250

Refinance to 150k loan at 75% of 200k. 

Refinance closing costs 6k

Overall I would have to leave 24k in if it appraises at 200k and 16k at 210k . I am OK with that as I could do this a couple times with the money I have saved.

This property barely breaks even but the numbers are far better than anything else I have found. It would create immediate equity and eventually rents would catch up but that could be a few years.

With the new seasoning rules you have to wait 12 months from creation of your last mortgage to refinance and pull cash out. Has anyone found a way around this?

Am I looking at this from a wrong angle?

How do I combat high property taxes that kill every deal? (Besides out of state investing)

Is it worth it to leave 25k in to sell and receive 50k after selling costs more or less in 1-2 years and avoid "flip taxes"? If I put 25k into stocks and pulled out 50k 1-2 years later I would be more than happy.

This is my first deal and I am just trying to get over the initial hurdle of the first property.

*Edit*

Property taxes take almost 33% of the rent.