Question regarding deal evaluation

[Luka Jozic]

Im on my 3rd property now and just getting more comfortable with all of this and now wanting to scale faster with BRRRR using hard money loans. I've been pretty strict with my numbers which is good in one sense, but I feel like Im missing out on deals. Im seeing lots of obviously more successful investors swearing by the 1% rule and buying properties where I just don't see how the numbers make sense. So as an example, lets say I do a SFH BRRRR and after rehab is complete I refi at $120K and rent is $1200/mo, this would be exactly the 1% rule right. At 120K and 75% LTV and 7% interest, the typical PIMI in Cleveland would be around $900/mo (this would be higher in Heights suburbs with higher taxes). I usually want to set aside 25% of rent for capex, repairs, vacancy, and management. So with $1200 rent that leaves $900 left. That means we have $0 cash flow. I understand that the idea of BRRRR is to pull all your money out, but Im finding that pretty difficult to achieve if I want some cash flow. Even if I refi at $100K instead, the cashflow would be around $140 a month but then I would have to be all in (purchase price + rehab) at $75K, which I also find very difficult to achieve. And that is not even considering the cost of a hard money loan and then the refi, which is somewhere around $7-8K.

So my question is, how are you guys evaluating deals? Am I being too conservative with my numbers? I have the capability to buy more than I currently am strictly because I find it hard to find deals where the numbers make sense to me.