[Calc Review] 20% Down BRRRR Bad Idea?

[Jacob Lemoine]

Hello BP Community,

1st post as a new investor. I've been following/studying BP for almost 5 years now and I am in a position to finally acquire my first property. I have attached a report with my estimation on numbers for a property. This is a property I am simply "looking at." The COC ROI is low initially but if I were to refinance later on it increases. I have been studying the BRRRR method but I was beginning to wonder.

Instead of purchasing with cash, why should I not finance with 20% down, rehab the property, rent it, and then refinance. In order to leverage my money a little more. Has anyone done this before? Why would this strategy be a bad idea?

I am also not understanding how the 1st year is $-7 total annual income.

Thanks in advance to any participation, just a new investor trying to learn.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Jacob Lemoine]

@Nate Herndon Thanks for the feedback. You bring up valid points, I did not even consider financing the rehab. Seems I'll be having a conversation with my lender to lay out all my financing options. Hopefully I can post an update here soon with what I end up doing and acquiring my first property.

Thanks guys.

@Jaron Walling