Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 1 year ago,

User Stats

2
Posts
0
Votes
Will Sawyer
Pro Member
0
Votes |
2
Posts

Should I BRRRR or Flip?

Will Sawyer
Pro Member
Posted

Need some guidance here as this will be my first flip or BRRRR. I Have a property under contract for 185k. Repairs are going to cost 47k and take 4-5 weeks. ARV I estimate to be around 300k give or take 10k. I have a private money lender fronting 175k with 2 points and 12% interest only. I'm bringing the rest of the cash and the rehab budget.

I'm not sure on whether or not I should BRRRR this or flip it. I've run an analysis and here's what I came up with BRRRR (pictured below). If I estimate an expense increase of 2% per year, 3% income increase per year and a 4% appreciation value per year, my cash on cash in 5 years is 30% and profit if sold would be 95k. Presently, $129/m cash flow is unattractive, however the 10% cash on cash and possibility of collecting more rent than only $2800 (conservative estimate) is what is making me question my decision to flip. I have an airbnb that is a 2/1 much closer to town that averages $2,500/m, so $3,000+ does seem quite reasonable to me.

OR

If I sold once the rehab is done (rehab completion timeline July 15th), my analysis says I'll have a cash on cash of 17% and collect roughly $44,000 in profit after expenses (also pictured below). 

I'm a Realtor and i'm blessed to make multiple 6 figures/year so I don't necessarily need the cash back, but If I get the cash back I could deploy that quickly into another deal, versus if I keep the house and airbnb I won't get that cash back but i'll have a cash flowing asset appreciating in value in a great part of the country. 

Any thoughts or direction would be greatly appreciated. Happy Memorial Day! 

  • Will Sawyer
  • Loading replies...